Behavioral Finance / Behavioral Economics

(the new frontiers of Finance and Economics)

A transcendental question before starting: when money is at stake, can somebody be really rational?

 

Definition of Behavioral finance, and content of this website section

 

Definition: Behavioral finance and behavioral economics study how we behave with money, production, work, spending, investment... Behavioral Finance (BF) is the application of individual and collective psychology to finance and by extension the application to economics, under the name of Behavioral Economics (BE) (*).  (*) Click here for a short description of economics and finance. BF is based on several types of research, which deal with various subfields such as: Behavioral finance micro aka "Psychological behavioral finance" or more simply "Financial psychology". It studies: How investors make choices And, as part of this decision process, investor behavioral biases / errors, Financial behaviors and money attitudes in general, which often are not fully rational, In savings, borrowing, insuring, tax management, gambling... Behavioral finance macro aka "Quantitative behavioral finance". It studies: The Effects of those behaviors on financial markets, Such as anomalies & inefficiencies on asset prices and returns. BF tries to detect and understand those biases / anomalies, and if possible to use them in investment strategies. To find more complete definitions of BF, please look at the links in chapter 2. below.

 

This section of our website gives an extensive range of information and education items on this financial / economic topic.

Here are the categories of contents:

1.   PURPOSE and TOPICS of our Behavioral Finance group

2.   Our free BF GALLERY: synthesis / glossary / FAQ / contributions

3.   A behavioral stock pricing tool: the STOCK IMAGE

4.   A mine of interesting RELATED SITES

5.   AUTHORS & BOOKS on Behavioral Finance

1. PURPOSE and TOPICS of our free Behavioral Finance group

We share information and opinions on financial approaches
going beyond the "efficient market hypothesis" shortcomings.

Our main information / discussion topics are:

• Market inefficiencies, price and return distortions, bubbles and crashes

• Investor biases, irrational investment decisions, investor styles, investor sentiment

• Reactions to information, manipulations

• Behavioral or experimental finance and economics

• Investment models based on investor behavior,

• Sometimes with incursions in related nonlinear market analysis...

• Administrative (public, corporate, managerial) behavior  / governance

More details about our discussion topics can be found at: BF Group description

Join our free Behavioral-Finance forum Founded May 6, 2000.  Now over 1800 members from all over the world

2. Your free GALLERY: Behavioral Finance glossary / FAQ Synthesis and contributions on BF

FAQ / Glossary / dictionary / encyclopedia ( 500+ Behavioral finance / Behavioral economics definitions, many as full articles, constantly completed and updated! ) . A    B   C    D   E   F    G-H   I-L  M    N-O   P-Q   R    S   T-U   V-Z  + Full list .

And also A short presentation of Behavioral finance in our Main BF concepts tables Or a bit more detailed general approach of BF essentials in our B-F synthesis pages

 

You can also do a comprehensive Word Search:

In this website    Or in our group messages: 1)click Behavioral-Finance group,        2) click "messages", 3) enter your query in "search archives"

See also Martin Sewell's treasure chest of academic behaviouralfinance papers

All members are welcome to send their contributions to enhance our collective encyclopedia.    Post to the Behavioral-Finance group (if you are already a member)

3. The PRACTICAL CORNER: An exclusive BEHAVIORAL STOCK PRICING TOOL: the Stock image + some practical investor precaution tips

To find all details on the "Stock image" operational stock pricing tool, click Behavioral Finance & Stock Image       (my site's main entrance) Or, if you are already familiar with the method, click Stockpricer to use our calculator      to do a stock valuation. For investor practical precaution tips (protection against biased behaviors) see bfpractice

4. A mine of interesting RELATED SITES, just a click away:

Our BF group's "bookmarks" Or this website's "links" (a broader choice of financial sites, not only on BF)

5.  AUTHORS & BOOKS on Behavioral Finance

(also, a page is under preparation to give a list of universities with BF courses, just a stub at the moment)