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- W1556479605 abstract "Publisher Summary This chapter provides a selective review of recent work in behavioral finance. Modern finance assumes that the study of substantively rational solutions to normative problems forms an adequate basis for understanding actual behavior. Substituting mathematical logic for empirical observation is regarded as convenient. To make scientific progress, some diversity in methods is probably a good thing. In particular, much is gained—and, possibly, some anomalies could be resolved—by careful observation of what people actually do. General behavioral principles are explored that apply in multiple economic contexts—for example, excessive self-confidence. Some principles are suggested and confirmed by psychological experiments. A systematic review of evidence that behavioral factors matter outside the laboratory, that is, even when a lot of money is at stake, is presented in the chapter. A pragmatic empirical work is presented to collect a set of robust empirical facts that stand out. The chapter discusses financial innovation during the last few decades. Three driving forces are suggested for this (1) the demand for completing the market, (2) the lowering of transactions costs, and (3) reductions in agency and monitoring costs. The innovation is interpreted as a response to regulatory changes. These forces, while relevant, leave out the central question of the design and the marketing of financial products." @default.
- W1556479605 created "2016-06-24" @default.
- W1556479605 creator A5015227670 @default.
- W1556479605 creator A5081252843 @default.
- W1556479605 date "1995-01-01" @default.
- W1556479605 modified "2023-10-09" @default.
- W1556479605 title "Chapter 13 Financial decision-making in markets and firms: A behavioral perspective" @default.
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