Behavioral Finance - Limited Rationality in Financial Markets

Over the last 50 years, neoclassical financial theory has been dominating our perception of what is happening in financial markets. It has spurred numerous valuable theories and concepts all based on the concept of Homo Economicus, the strictly rational economic man. However, humans do not always act in a strictly rational manner. For students and practitioners alike, our book aims at opening the door to another perspective on financial markets: a behavioral perspective based on a Homo Oeconomicus Humanus. This agent acts with limited rationality when making decisions. He/she uses heuristics and shortcuts and is prone to the influence of emotions. This sounds familiar in real life and can be transferred to what happens in financial markets, too.

Inhaltsverzeichnis:

Section 1: The Homo Economicus in the center of Traditional Finance
1. How Traditional Finance shaped the Rational Economic Man
2. Limitations of the traditional finance theory
Section II: Recurring speculative bubbles - triggered by the Homo Oeconomicus Humanus
3. Investor behavior from the perspective of Behavioral Finance
4. Speculative bubbles as a sign of market anomalies
5. Historical speculative asset price bubbles
Section III: Homo Oeconomicus Humanus in information and decision making processes
6. Phases of decisions making
7. Limited rationality in the perception of information
8. Limited rationality in the processing of information
9. Limited rationality in investment decisions
Section IV: Applications of Behavioral Finance and recent developments
10. Applications of Behavioral Finance in Wealth Management
11. Application of Behavioral Finance in corporate management
12. Financial Nudging - behavioral approaches for better financial decisions
13. Further development of Behavioral Finance - a look into the future