Download or read book Risk Aversion and Herd Behavior in Financial Markets written by J. P. Decamps and published by . This book was released on 2013 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that differences in investor risk aversion can generate herd behavior in stock market where assets are traded sequentially. This in turn prevents markets from being efficicent in the sense that a financial market prices do not converge to the asset fundamental value. The information efficiency of the markets depends on the distribution of the risky asset across risk averse agents. These results are obtained without introducing multidimensional uncertainty.
Download or read book Risk Aversion and Herd Behavior in Financial Markets written by Jean-Paul Decamps and published by . This book was released on 2002 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Herd Behavior in Financial Markets written by Sushil Bikhchandani and published by . This book was released on 2000 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Herd Behavior in Financial Markets written by Antonio Guarino and published by INTERNATIONAL MONETARY FUND. This book was released on 2008-06-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study herd behavior in a laboratory financial market with financial market professionals. We compare two treatments, one in which the price adjusts to the order flow so that herding should never occur, and one in which event uncertainty makes herding possible. In the first treatment, subjects herd seldom, in accordance with both the theory and previous experimental evidence on student subjects. A proportion of subjects, however, engage in contrarianism, something not accounted for by the theory. In the second treatment, the proportion of herding decisions increases, but not as much as theory suggests; moreover, contrarianism disappears altogether.
Download or read book Financial Behavior written by H. Kent Baker and published by Oxford University Press. This book was released on 2017-05-02 with total page 681 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Behavior: Players, Services, Products, and Markets provides a synthesis of the theoretical and empirical literature on the financial behavior of major stakeholders, financial services, investment products, and financial markets. The book offers a different way of looking at financial and emotional well-being and processing beliefs, emotions, and behaviors related to money. The book provides important insights about cognitive and emotional biases that influence various financial decision-makers, services, products, and markets. With diverse concepts and topics, the book brings together noted scholars and practitioners so readers can gain an in-depth understanding about this topic from experts from around the world. In today's financial setting, the discipline of behavioral finance is an ever-changing area that continues to evolve at a rapid pace. This book takes readers through the core topics and issues as well as the latest trends, cutting-edge research developments, and real-world situations. Additionally, discussion of research on various cognitive and emotional issues is covered throughout the book. Thus, this volume covers a breadth of content from theoretical to practical, while attempting to offer a useful balance of detailed and user-friendly coverage. Those interested in a broad survey will benefit as will those searching for more in-depth presentations of specific areas within this field of study. As the seventh book in the Financial Markets and Investment Series, Financial Behavior: Players, Services, Products, and Markets offers a fresh looks at the fascinating area of financial behavior.
Download or read book Behavioural Finance written by Singh Shuchita & Bahi Shilpa and published by Vikas Publishing House. This book was released on with total page 261 pages. Available in PDF, EPUB and Kindle. Book excerpt: The theories and concepts of behavioural finance are not widely studied. In many countries, the acceptance level of behavioural theories is quite low. However, the increasing instances of various anomalies of financial markets have forced many researchers to look closer to this modern field of finance. Behavioural Finance seeks to bring together all the concepts and theories developed by renowned international and national researchers and practitioners in financial markets. An in-depth study has been made to explain the current economic downturn and the role of behavioural finance in it. KEY FEATURES • Interviews: Latest industry views by various asset-class experts • Facts: Important factual information in boxes titled 'Do You Know?' • Abbreviations: Important and relevant abbreviated terms • Model Test Papers: For practice • Summary: Given as 'Key Learning Points' for revision
Download or read book Herd Behavior in Financial Markets written by Marco Cipriani and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study herd behavior in a laboratory financial market with financial market professionals. We compare two treatments, one in which the price adjusts to the order flow so that herding should never occur, and one in which event uncertainty makes herding possible. In the first treatment, subjects herd seldom, in accordance with both the theory and previous experimental evidence on student subjects. A proportion of subjects, however, engage in contrarianism, something not accounted for by the theory. In the second treatment, the proportion of herding decisions increases, but not as much as theory suggests; moreover, contrarianism disappears altogether.
Download or read book Herd Behavior and Asset Pricing in the Indian Stock Market written by Yash Chauhan and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Investor behaviour has for long been a topic of interest for economists, portfolio managers and several other market participants who are keen to ascertain the role of investor psychology in market microstructure and price discovery process. Literature on financial economics suggests that market participants tend to suppress their own information and try to imitate others in the market, thereby herding against their private information. This tendency is attributed to risk aversion characteristic of economic agents that rely more on short cuts and heuristics in order to avoid risk of losing time required to incorporate private information. Such a tendency also results in the asymmetric expected returns on assets. We attempt to find empirical evidence of herding in two different cross-sections of financial markets using cross-sectional deviations of stock returns to measure the dispersion of individual stock returns from average market return. Using a unique dataset of daily stock returns from January 2011 to December 2015, we examine the small and large-cap stocks for the effect of herding. We study the existence of herding in two cross-sections of stocks in the Indian stock market and show that stocks with robust fundamentals observe little or negligible evidence of herding while vulnerable stocks are evidently found to be affected by herding. While examining herding, we show whether the cross-sectional dispersion of stock returns in large-cap stocks are lower compared to that in small-cap stocks, implying stocks with higher market cap and trading volume are less prone to herding.
Download or read book Investor Behavior written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2014-02-10 with total page 645 pages. Available in PDF, EPUB and Kindle. Book excerpt: WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.
Download or read book Stock market Psychology written by Karl Erik W‹rneryd and published by Edward Elgar Publishing. This book was released on 2001-01-01 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'Stock-Market Psychology gives an excellent overview of the state-of-the-art literature on this subject in the fields of economics, psychology and finance. . . a comprehensive overview of the behavior of investors in the stock market. As such, this book is valuable for the classroom. . . Stock-Market Psychology provides researchers with numerous ideas for future research and readers with useful and fun tips without taking away our hopes of ever becoming rich from investing in stocks. What more is there to ask from a book?' - Joost M.E. Pennings, Journal of Economic Psychology 'George Goodman (Adam Smith) once wrote, "you can find out who you are by investing in the stock market, but it will be an expensive lesson". It is far smarter and cheaper to read Wärneryd's book instead. At a time when global stock markets are driven by emotions and passions, and are highly volatile, Chapter Six will tell you why, far better than a hundred analysts' reports.' - Shlomo Maital, TIM-Technion Institute of Management and the Samuel Neaman Institute for Advanced Studies in Science and Technology, Israel The rationale behind how people value and trade stocks is of unparalleled interest to governments, companies and other participants in stock markets. The book focuses on the way in which investors process information and form expectations about future gains. It argues that humans fall short of the perfect information processing required by theory, and that their expectations are based on more than just future company earnings.
Download or read book Behavioral Finance Where Do Investors Biases Come From written by Itzhak Venezia and published by World Scientific. This book was released on 2016-10-27 with total page 395 pages. Available in PDF, EPUB and Kindle. Book excerpt: This unique volume presents new original research exploring factors that lead to investors behavioral biases. It discusses how features such as professionalism, sophistication, gender, media, and culture influence investors' decision-making in general, and in particular, how they generate (or limit) behavioral and cognitive biases. The effects of these factors on capital markets are also discussed. The book is based on the discussions and presentations at the First Israel Behavioral Finance Conference, which took place in Tel Aviv in May 2015. It examines in greater detail some of the key issues discussed at the conference.This is an innovative book in behavioral finance: it is the first to present an extensive collection of papers which discuss a comprehensive array of factors that influence or define investor character and analyzes these factors' effects on financial markets. The book is useful for readers interested in understanding the factors that influence investors' profiles and thus their behavioral biases. The book will be of great interest to researchers and students seeking a reference book which contains timely research on these areas of behavioral finance.
Download or read book Herd Behavior in Financial Markets written by Sushil Bikhchandani and published by . This book was released on 2005 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets. It addresses the following questions: What precisely do we mean by herding? What could be the causes of herd behavior? What success have existing studies had in identifying such behavior? And what effect does herding have on financial markets?
Download or read book The Herd Behavior Index written by Jan Dhaene and published by . This book was released on 2015 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: We introduce a new and easy to calculate measure for systemic risk in financial markets. This measure is baptized the Herd Behavior Index (HIX). It is model independent and forward looking, based on observed option data.In order to determine the degree of systemic risk or herd behavior in a financial market one should compare the observed market situation with the extreme (theoretical) situation under which the whole system is driven by a single factor.The Herd Behavior Index (HIX) is defined as the ratio of an option-based estimate of the risk-neutral variance of the market index and an option-based estimate of the corresponding variance of this extreme market situation. Using the theory of comonotonicity, the extreme situation can easily be backed out of the observed option quotes.The HIX can be determined for any market index provided an appropriate series of vanilla options is traded on this index as well as on its components. As an illustration, we determine historical values of the 30-days implied Herd Behavior Index for the Dow Jones Industrial Average, covering the period January 2003 to October 2009.
Download or read book A Study of Some Effects of Informational Differences and Risk aversion on Investor Behavior in Financial Markets written by Rafiq Dossani and published by . This book was released on 1982 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Irrationality in financial markets written by Nelle Plotkin and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Contemporary Issues in Behavioral Finance written by Simon Grima and published by Emerald Group Publishing. This book was released on 2019-07-04 with total page 259 pages. Available in PDF, EPUB and Kindle. Book excerpt: This special edition of Contemporary Studies in Economic and Financial Analysis offers seventeen chapters from invited participants in the International Applied Social Science Congress, held in Turkey between the 19th and 21st April 2018.
Download or read book The Impact of Behavioral Biases on Investor s Behavior in Indian Stock Market written by Yamini Gupta and published by . This book was released on 2017 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital Asset Pricing Model, Efficient Market Hypothesis and Modern Portfolio Theory (Traditional Financial Theories) presumes that financial markets are perfect and all the investors behave rationally. In other words, these theories believe that whatever new information comes in the market, it is instantly absorbed by the stock prices; thus, eliminating the possibility of earning more profits just by having the company's insider information. But, there are many empirical studies done before which shows that investors while trading in stock market are not rational always, rather their decisions are affected by many other factors. Thus, the present paper focuses on determining the various behavioral biases that influence investor's decision making process. The data for the same was gathered from 380 respondents residing in Delhi/NCR to test the presence of Loss Aversion, Regret Aversion, Herd Behavior, Overconfidence Bias and Cognitive Dissonance Bias. Further, Principal Component Analysis was used to analyse the collected data. It was found that all these biases have moderate impact on the investor's decision making process. These findings shall help the investors in understanding the most common behavioral biases to which they are vulnerable to in order to help them to mitigate the risk factor in investment for better returns. It shall also help financial planners in customizing portfolios and asset allocation strategies for their clients.
