Behavioral Finance: Investors, Corporations, and Markets

Behavioral finance has increasingly become part of mainstream finance—helping to provide explanations for our economic decisions by combining behavioral and cognitive psychological theory with conventional economics and finance.Filled with in-depth insights and practical advice, this reliable resource—part of the Robert W. Kolb Series in Finance—provides a comprehensive view of behavioral finance by discussing the current state of research in this area and detailing its potential impact on investors, corporations, and markets.Comprising contributed chapters by distinguished experts from some of the most influential firms and universities in the world, Behavioral Finance provides a synthesis of the essential elements of this discipline including psychological concepts and behavioral biases; the behavioral aspects of asset pricing, asset allocation, and market prices; investor behavior, corporate managerial behavior, and social influences. Divided into six comprehensive parts, it skillfully: Describes the fundamental heuristics, cognitive errors, and psychological biases that affect financial decisions Discusses market inefficiency and behavioral-based pricing models Explores corporate and executive behavioral finance and examines the behavioral influences involving their investment and financing decisions Addresses how behavioral finance applies to individual and institutional investors' holdings and their trading endeavors Shows how cultural factors and societal attitudes affect markets Behavioral Finance contains the latest information from some of the leading practitioners and academics in this field. Engaging and accessible, this book provides a clear understanding of how people make financial decisions and their effects on today's markets.

About the Author

H. KENT BAKER, PHD, CFA, CMA, is University Professor of Finance and Kogod Research Professor at the Kogod School of Business, American University. He has published extensively in leading academic and professional finance journals including the Journal of Finance Journal of Financial and Quantitative Analysis,Financial Management, Financial Analysts Journal, Journal of Portfolio Management, and Harvard Business Review. Professor Baker is recognized as one of the most prolific authors in finance during the past fifty years. He has consulting and training experience with more than 100 organizations and has been listed in fifteen biographies.

JOHN R. NOFSINGER is an Associate Professor of Finance and Nihoul Faculty Fellow at Washington State University. He is one of the world's leading experts in behavioral finance and is a frequent speaker on this topic at investment management conferences, universities, and academic conferences. Nofsinger has often been quoted or appeared in the financial media, including the Wall Street Journal, Financial Times, Fortune, BusinessWeek, Bloomberg, and CNBC. He writes a blog called "Mind on My Money" at psychologytoday.com.