Work

Behavioral Finance: Quo Vadis?

Year: 2008

Type: article

Abstract: Behavioral finance endeavors to bridge the gap between finance and psychology. Now an established field, behavioral finance studies investor decision processes which in turn shed light on anomalies, i.e., departures from neoclassical finance theory. This paper is the summary of a panel discussion. It begins by reviewing the foundations of finance and it ends with a discussion of the future of behavioral finance and a self-critique. We describe the move from the standard view that financial decision making is rational to a behavioral approach based on judgmental heuristics, biases, mental frames, and new theories of choice under risk. A new class of asset pricing models, which adds behavioral elements to the standard framework, is proposed.

Authors: Werner De Bondt, Yaz Gülnur Muradoğlu, Hersh Shefrin, Sotiris K. Staikouras

Institutions: DePaul University, Queen Mary University of London, City, University of London, Santa Clara University, Alba Graduate Business School, The American College of Greece

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3121544422

FWCI: 4.11

Cites: 81

Cited by: 114

Related to: 10