ISSN:
1573-7187
Keywords:
financial market
;
decision theory
;
behavioral decision
;
financial flows
;
rationality
;
herd behavior
Source:
Springer Online Journal Archives 1860-2000
Topics:
Sociology
,
Economics
Notes:
Abstract The insights of descriptive decision theorists and psychologists, we believe, have much to contribute to our understanding of financial market macrophenomena. We propose an analytic agenda that distinguishes those individual idiosyncrasies that prove consequential at the macro-level from those that are neutralized by market processes such as poaching. We discuss five behavioral traits — barn-door closing, expert/reliance effects, status quo bias, framing, and herding — that we employ in explaining financial flows. Patterns in flows to mutual funds, to new equities, across national boundaries, as well as movements in debt-equity ratios are shown to be consistent with deviations from rationality.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00132995
Permalink
