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The Financial Consequences of Behavioural Biases

An Analysis of Bias in Corporate Finance and Financial Planning

  • Imad A. Moosa
  • Vikash Ramiah

Table of contents

  1. Front Matter
    Pages i-xv
  2. Imad A. Moosa, Vikash Ramiah
    Pages 1-25
  3. Imad A. Moosa, Vikash Ramiah
    Pages 27-44
  4. Imad A. Moosa, Vikash Ramiah
    Pages 45-69
  5. Imad A. Moosa, Vikash Ramiah
    Pages 93-124
  6. Imad A. Moosa, Vikash Ramiah
    Pages 125-150
  7. Imad A. Moosa, Vikash Ramiah
    Pages 151-162
  8. Back Matter
    Pages 163-174

About this book

Introduction

This book provides a concise analysis of behavioural biases and their implications for financial decision making. The book is written in the normative tradition, arguing strongly for the superiority of behavioural finance with respect to explaining observed phenomena in financial markets. It offers some unique features, including a discussion of the issue of conspiracy theory and how behavioural biases lead to belief in conspiracy theories. Lingering belief in the principles of neoclassical finance is attributed in part to the doctrine of publish or perish, which dominates contemporary academia. The offshoots of behavioural finance are discussed in detail, including ecological finance, environmental finance, social finance, experimental finance, neurofinance, and emotional finance. A comprehensive discussion of narcissism is presented where it is demonstrated that narcissistic behaviour is prevalent in the finance industry and that it led to the eruption of the global financial crisis.

Keywords

Investor bias Stock market Corporate finance Financial planning Trading strategies Overconfidence Prospect theory Loss aversion bias Disposition effect Rationality

Authors and affiliations

  • Imad A. Moosa
    • 1
  • Vikash Ramiah
    • 2
  1. 1.School of Economics, Finance and MarketingRMITMelbourneAustralia
  2. 2.School of CommerceUNISAAdelaideAustralia

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-69389-7
  • Copyright Information The Editor(s) (if applicable) and The Author(s) 2017
  • Publisher Name Palgrave Macmillan, Cham
  • eBook Packages Economics and Finance
  • Print ISBN 978-3-319-69388-0
  • Online ISBN 978-3-319-69389-7
  • Buy this book on publisher's site