Traditionally, economists have based their analysis of financial markets and corporate finance on the assumption that agents are fully rational, emotionless, self-interested maximizers of expected utility. However, behavioural economists are increasingly recognizing that financial decision makers may be subject to psychological biases, and the effects of emotions. Examples of this include the effects on investors’ and managers’ decision-making of such biases as excessive optimism, overconfidence, confirmation bias, and illusion of control. At a practical level, the current state of the financial markets suggests that trust between investors and managers is of paramount importance.
Routledge Advances in Behavioural Economics and Finance presents innovative and cutting edge research in this fast paced and rapidly growing area, and will be of great interest to academics, practitioners, and policy-makers alike.
Cass R. Sunstein, Lucia A. Reisch
January 17, 2019
Many "nudges" aim to make life simpler, safer, or easier for people to navigate, but what do members of the public really think about these policies? Drawing on surveys from numerous nations around the world, Sunstein and Reisch explore whether citizens approve of nudge policies. Their most...
Cameron Elliott Gordon
June 28, 2018
Corporate governance failures are all too frequent and their patterns and outcomes seem avoidably familiar. This book examines the findings of behavioural finance and economics that are most relevant to governance problems, and suggests potential solutions that are best suited to real-world...
February 12, 2018
Economics Nobel Laureate Herbert Simon developed the concept of bounded rationality in the 1950s. This asserts that the cognitive abilities of human decision-makers are not always sufficient to find optimal solutions to complex real-life problems, leading decision-makers to find satisfactory,...
Philip Alexander Rajko
November 11, 2013
Economics and moral philosophy have in recent years been considered to be distinct and separate fields. However, behavioural economics has started to reconcile various aspects of morality and economics, which has offered new conceptual opportunities to advance economics ethics and business ethics....