Behavioral Finance: Investors, Corporations, and Markets

  • 20h 9m
  • H. Kent Baker, John R. Nofsinger
  • John Wiley & Sons (US)
  • 2010

A definitive guide to the growing field of behavioral finance

This reliable resource provides a comprehensive view of behavioral finance and its psychological foundations, as well as its applications to finance. Comprising contributed chapters written by distinguished authors from some of the most influential firms and universities in the world, Behavioral Finance provides a synthesis of the most essential elements of this discipline, including psychological concepts and behavioral biases, the behavioral aspects of asset pricing, asset allocation, and market prices, as well as investor behavior, corporate managerial behavior, and social influences.

  • Uses a structured approach to put behavioral finance in perspective
  • Relies on recent research findings to provide guidance through the maze of theories and concepts
  • Discusses the impact of sub-optimal financial decisions on the efficiency of capital markets, personal wealth, and the performance of corporations

Behavioral finance has quickly become part of mainstream finance. If you need to gain a better understanding of this topic, look no further than this book.

About the Author

H. Kent Baker, PhD, CFA, CMA, is University Professor of Finance and Kogod Research Professor at the Kogod School of Business, American University. He has published extensively in leading academic and professional finance journals including the Journal of Finance, Journal of Financial and Quantitative Analysis, Financial Management, Financial Analysts Journal, Journal of Portfolio Management, and Harvard Business Review. Professor Baker is recognized as one of the most prolific authors in finance during the past fifty years. He has consulting and training experience with more than 100 organizations and has been listed in fifteen biographies.

John R. Nofsinger is an Associate Professor of Finance and Nihoul Faculty Fellow at Washington State University. He is one of the world's leading experts in behavioral finance and is a frequent speaker on this topic at investment management conferences, universities, and academic conferences. Nofsinger has often been quoted or appeared in the financial media, including the Wall Street Journal, Financial Times, Fortune, BusinessWeek, Bloomberg, and CNBC. He writes a blog called "Mind on My Money" at

In this Book

  • Behavioral Finance: An Overview
  • Traditional Versus Behavioral Finance
  • Behavioral Finance: Application and Pedagogy in Business Education and Training
  • Heuristics or Rules of Thumb
  • Neuroeconomics and Neurofinance
  • Emotional Finance: The Role of the Unconscious in Financial Decisions
  • Experimental Finance
  • The Psychology of Risk
  • Psychological Influences on Financial Regulation and Policy
  • Disposition Effect
  • Prospect Theory and Behavioral Finance
  • Cumulative Prospect Theory: Tests Using the Stochastic Dominance Approach
  • Overconfidence
  • The Representativeness Heuristic
  • Familiarity Bias
  • Limited Attention
  • Other Behavioral Biases
  • Market Inefficiency
  • Belief- and Preference-Based Models
  • Enterprise Decision Making as Explained in Interview-Based Studies
  • Financing Decisions
  • Capital Budgeting and Other Investment Decisions
  • Dividend Policy Decisions
  • Loyalty, Agency Conflicts, and Corporate Governance
  • Initial Public Offerings
  • Mergers and Acquisitions
  • Trust Behavior: The Essential Foundation of Securities Markets
  • Individual Investor Trading
  • Individual Investor Portfolios
  • Cognitive Abilities and Financial Decisions
  • Pension Participant Behavior
  • Institutional Investors
  • Derivative Markets
  • The Role of Culture in Finance
  • Social Interactions and Investing
  • Mood