Download or read book Cognitive Biases in the Capital Investment Context written by Sebastian Serfas and published by Springer Science & Business Media. This book was released on 2010-12-06 with total page 265 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sebastian Serfas shows how cognitive biases systematically affect and distort capital investment-related decision making and business judgements. He provides a large number of examples that every business practitioner might encounter every day, demonstrates the detrimental effects through various empirical experiments, and outlines potential counterstrategies to mitigate these negative effects.
Download or read book Understanding Behavioral BIA written by Daniel C. Krawczyk and published by Business Expert Press. This book was released on 2019-11-13 with total page 217 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes the biases most relevant to investing, include background on how biases develop, and offer practical strategies to help you to improve your performance. The authors offer a guide to categorizing biases based on cutting-edge brain science, which will enable readers to implement best practices that guard against whole sets of biases. Emphasis is placed on the practical implications of financial decision-making and provides a scientific basis for adjusting investing practices, to avoid common cognitive traps.
Download or read book Does Knowledge about Biases Reduce Their Impact on Investment Decisions written by Jonas Frey and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines whether training can mitigate the effect of cognitive biases both in a general and in an investment context. An online survey was conducted to measure how biased subjects were and how much knowledge about biases they possessed. The results were mixed: For miscalibration and the availability bias there was a clear link between previous knowledge and a smaller bias, for all other biases there was no clear link. Furthermore, it was found that behavioural finance courses are not superior to general education about biases in reducing finance specific biases.
Download or read book Behavioral Finance and Wealth Management written by Michael M. Pompian and published by John Wiley & Sons. This book was released on 2011-01-31 with total page 393 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Pompian is handing you the magic book, the one that reveals your behavioral flaws and shows you how to avoid them. The tricks to success are here. Read and do not stop until you are one of very few magicians." —Arnold S. Wood, President and Chief Executive Officer, Martingale Asset Management Fear and greed drive markets, as well as good and bad investment decision-making. In Behavioral Finance and Wealth Management, financial expert Michael Pompian shows you, whether you're an investor or a financial advisor, how to make better investment decisions by employing behavioral finance research. Pompian takes a practical approach to the science of behavioral finance and puts it to use in the real world. He reveals 20 of the most prominent individual investor biases and helps you properly modify your asset allocation decisions based on the latest research on behavioral anomalies of individual investors.
Download or read book Irrational Behavior of Individual Household Investors written by P. Vijayalakshmi and published by . This book was released on 2020 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: All investors thrive to make their investments safe and vies to make their investments productive so the process making these investments decision needs to be future oriented. The fear of uncertainty and the risk factors influence the investment decisions of the investors and sometimes cognitive bias of the investors which is in turn reflected in the return, market value and risks. The cognitive biases namely overconfidence, ambiguity aversion, mental accounting, confirmation bias, regency and framing bias are the most dominating factors in the process of decision-making. This paper attempts to examine the influence of cognitive biases in making their investments. The authors analyzed 392 individual investors from the households of Tamil Nadu from various cities. The collected data is analyzed by applying proper statistical tools and AMOS available in the SPSS package. It is evident from the study that the sampled households exhibit irrational behavior considering the investment and even while making investment decision. The cluster analysis proved that high numbers of investors are negatively influenced by cognitive bias while taking investment decisions.
Download or read book Investment Traps Exposed written by H. Kent Baker and published by Emerald Group Publishing. This book was released on 2017-03-20 with total page 447 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investment Traps Exposed helps investors and investment practitioners increase their awareness about the external and internal traps that they or their clients can encounter.
Download or read book How to De Bias Investment Judgement Unpacking Bias and Possible Remedies in a Cap Ital Investment Context written by Andreas Scherm and published by . This book was released on 2020 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extant research shows that managerial decision-making can be biased. One bias that has received attention from the psychological literature yet very little attention from business research is the unpacking bias. This bias suggests that the perceived probability that an event will occur generally increases when the event's description is unpacked into a dis-junction of sub-events. We conduct an experiment with experienced managers (N = 249) and hypothesize that for a capital investment decision context, managers' judgement of the probability of a future event depends on whether the event is described as one packed event or is unpacked into several disjoint sub-events. Additionally, we propose that altering the format of the description of an event's occurrence from percentage values to relative frequencies reduces the unpacking bias. The results are consistent with both hypotheses. We do not find that using explicit instructions as an additional de-biasing measure further improves judgement. Our results contribute to research on managerial biases and provide practical implications for the design of management reports that are used as an informational basis for investment decisions.
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 Lecture Notes In Behavioral Finance written by Itzhak Venezia and published by World Scientific. This book was released on 2018-06-27 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume presents lecture notes for a course in behavioral finance, most suitable for MBA students, but also adaptable for a PhD class. These lecture notes are based on the author's experience in teaching behavioral finance classes at Bocconi University (at the PhD level) and at the Academic College of Tel Aviv-Yaffo (MBA).Written in a way that is user-friendly for both teachers and students, this book is the first of its kind and consolidates all the material necessary for a course on behavioral finance, balancing psychological concepts with financial applications. Material formerly presented only in academic papers has been transformed to a format more suitable for students, while the most important issues have been highlighted in boxes that can form the basis of a lecturer's teaching slides.In addition to corralling all the currently scattered materials into one book, a neat logical order is introduced to the subject matter. Behavioral finance is put in a context relative to the other disciplines of finance, its history is outlined and the way it evolved — from an eclectic collection of counter examples to market efficiency into a bona fide discipline of finance — is reviewed and explained.The 17 topic-based chapters in this book are each intended for a 90-minute lecture. The first five chapters (Part 1) provide the psychological and financial foundations of behavioral finance. The next 12 chapters (Part 2) are applications: Chapters 6-13 cover the essentials while Chapters 14-17 are special, elective topics.
Download or read book Behavioral Corporate Finance written by Hersh Shefrin and published by College Ie Overruns. This book was released on 2017-04-16 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Psychology of Investing written by John R. Nofsinger and published by Routledge. This book was released on 2016-07 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: A supplement for undergraduate and graduate Investments courses. See the decision-making process behind investments. The Psychology of Investing is the first text of its kind to delve into the fascinating subject of how psychology affects investing. Its unique coverage describes how investors actually behave, the reasons and causes of that behavior, why the behavior hurts their wealth, and what they can do about it. Features: What really moves the market: Understanding the psychological aspects. Traditional finance texts focus on developing the tools that investors use for calculating risk and return. The Psychology of Investing is one of the first texts to delve into how psychology affects investing rather than solely focusing on traditional financial theory. This text’s material, however, does not replace traditional investment textbooks but complements them, helping students become better informed investors who understand what motivates the market. Keep learning consistent: Most of the chapters are organized in a similar succession. This approach adheres to following order: -A psychological bias is described and illustrated with everyday behavior -The effect of the bias on investment decisions is explained -Academic studies are used to show why investors need to remedy the problem Growing with the subject matter: Current and fresh information. Because data on investor psychology is rapidly increasing, the fifth edition contains many new additions to keep students up-to-date. The new Chapter 12: Psychology in the Mortgage Crisis describes the psychology involved in the mortgage industry and ensuing financial crisis. New sections and sub-sections include “Buying Back Stock Previously Sold”, “Who Is Overconfident,” "Nature or Nurture?”, "Preferred Risk Habitat," "Market Impacts," "Language," and “Reference Point Adaptation.”
Download or read book Foundations of Rule Learning written by Johannes Fürnkranz and published by Springer Science & Business Media. This book was released on 2012-11-06 with total page 345 pages. Available in PDF, EPUB and Kindle. Book excerpt: Rules – the clearest, most explored and best understood form of knowledge representation – are particularly important for data mining, as they offer the best tradeoff between human and machine understandability. This book presents the fundamentals of rule learning as investigated in classical machine learning and modern data mining. It introduces a feature-based view, as a unifying framework for propositional and relational rule learning, thus bridging the gap between attribute-value learning and inductive logic programming, and providing complete coverage of most important elements of rule learning. The book can be used as a textbook for teaching machine learning, as well as a comprehensive reference to research in the field of inductive rule learning. As such, it targets students, researchers and developers of rule learning algorithms, presenting the fundamental rule learning concepts in sufficient breadth and depth to enable the reader to understand, develop and apply rule learning techniques to real-world data.
Download or read book Handbook of Systems Engineering and Risk Management in Control Systems Communication Space Technology Missile Security and Defense Operations written by Anna M. Doro-on and published by CRC Press. This book was released on 2022-09-27 with total page 817 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides multifaceted components and full practical perspectives of systems engineering and risk management in security and defense operations with a focus on infrastructure and manpower control systems, missile design, space technology, satellites, intercontinental ballistic missiles, and space security. While there are many existing selections of systems engineering and risk management textbooks, there is no existing work that connects systems engineering and risk management concepts to solidify its usability in the entire security and defense actions. With this book Dr. Anna M. Doro-on rectifies the current imbalance. She provides a comprehensive overview of systems engineering and risk management before moving to deeper practical engineering principles integrated with newly developed concepts and examples based on industry and government methodologies. The chapters also cover related points including design principles for defeating and deactivating improvised explosive devices and land mines and security measures against kinds of threats. The book is designed for systems engineers in practice, political risk professionals, managers, policy makers, engineers in other engineering fields, scientists, decision makers in industry and government and to serve as a reference work in systems engineering and risk management courses with focus on security and defense operations.
Download or read book A Behavioral Approach to Asset Pricing written by Hersh Shefrin and published by Elsevier. This book was released on 2008-05-19 with total page 636 pages. Available in PDF, EPUB and Kindle. Book excerpt: Behavioral finance is the study of how psychology affects financial decision making and financial markets. It is increasingly becoming the common way of understanding investor behavior and stock market activity. Incorporating the latest research and theory, Shefrin offers both a strong theory and efficient empirical tools that address derivatives, fixed income securities, mean-variance efficient portfolios, and the market portfolio. The book provides a series of examples to illustrate the theory. The second edition continues the tradition of the first edition by being the one and only book to focus completely on how behavioral finance principles affect asset pricing, now with its theory deepened and enriched by a plethora of research since the first edition
Download or read book Know Your Price written by Andre M. Perry and published by Brookings Institution Press. This book was released on 2020-05-19 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: The deliberate devaluation of Blacks and their communities has had very real, far-reaching, and negative economic and social effects. An enduring white supremacist myth claims brutal conditions in Black communities are mainly the result of Black people's collective choices and moral failings. “That's just how they are” or “there's really no excuse”: we've all heard those not so subtle digs. But there is nothing wrong with Black people that ending racism can't solve. We haven't known how much the country will gain by properly valuing homes and businesses, family structures, voters, and school districts in Black neighborhoods. And we need to know. Noted educator, journalist, and scholar Andre Perry takes readers on a tour of six Black-majority cities whose assets and strengths are undervalued. Perry begins in his hometown of Wilkinsburg, a small city east of Pittsburgh that, unlike its much larger neighbor, is struggling and failing to attract new jobs and industry. Bringing his own personal story of growing up in Black-majority Wilkinsburg, Perry also spotlights five others where he has deep connections: Detroit, Birmingham, New Orleans, Atlanta, and Washington, D.C. He provides an intimate look at the assets that should be of greater value to residents—and that can be if they demand it. Perry provides a new means of determining the value of Black communities. Rejecting policies shaped by flawed perspectives of the past and present, it gives fresh insights on the historical effects of racism and provides a new value paradigm to limit them in the future. Know Your Price demonstrates the worth of Black people's intrinsic personal strengths, real property, and traditional institutions. These assets are a means of empowerment and, as Perry argues in this provocative and very personal book, are what we need to know and understand to build Black prosperity.
Download or read book Risk Profiling through a Behavioral Finance Lens written by Michael Pompian and published by CFA Institute Research Foundation. This book was released on 2016-03-03 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This piece examines risk profiling through a behavioral finance lens. Behavioral finance attempts to understand and explain actual investor behavior, in contrast to theorizing about investor behavior. It differs from traditional (or standard) finance, which is based on assumptions of how investors and markets should behave. Much has been written about the tension that exists between the willingness to take risk and the ability to take risk. Risk appetite is the willingness to take risk and risk capacity is the ability to take risk. In the behavioral context, risk appetite and risk capacity are defined in terms of known risks and unknown risks. Irrational client behavior often occurs when a client experiences unknown risks. To aid in the advisory process, advisors can use Behavioral Investor Types to help make rapid yet insightful assessments of what type of investor they are dealing with before recommending an investment plan. With a better understanding of behavioral finance vis-à-vis risk taking, practitioners can enhance their understanding of client preferences and better inform their recommendations of investment strategies and products.
Download or read book Robo Advisory written by Peter Scholz and published by Springer Nature. This book was released on 2020-12-28 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt: Robo-Advisory is a field that has gained momentum over recent years, propelled by the increasing digitalization and automation of global financial markets. More and more money has been flowing into automated advisory, raising essential questions regarding the foundations, mechanics, and performance of such solutions. However, a comprehensive summary taking stock of this new solution at the intersection of finance and technology with consideration for both aspects of theory and implementation has so far been wanting. This book offers such a summary, providing unique insights into the state of Robo-Advisory. Drawing on a pool of expert authors from within the field, this edited collection aims at being the vital go-to resource for academics, students, policy-makers, and practitioners alike wishing to engage with the topic. Split into four parts, the book begins with a survey of academic literature and its key insights paired with an analysis of market developments in Robo-Advisory thus far. The second part tackles specific questions of implementation, which are complemented by practical case studies in Part III. Finally, the fourth part looks ahead to the future, addressing questions of key importance such as artificial intelligence, big data, and social networks. Thereby, this timely book conveys both a comprehensive grasp of the status-quo as well as a guiding outlook onto future trends and developments within the field.
