An Introduction to Socio-Finance

  • Jørgen Vitting Andersen
  • Andrzej Nowak

Table of contents

  1. Front Matter
    Pages i-xiii
  2. Jørgen Vitting Andersen, Andrzej Nowak
    Pages 1-23
  3. Jørgen Vitting Andersen, Andrzej Nowak
    Pages 25-58
  4. Jørgen Vitting Andersen, Andrzej Nowak
    Pages 121-141
  5. Jørgen Vitting Andersen, Andrzej Nowak
    Pages 143-166
  6. Jørgen Vitting Andersen, Andrzej Nowak
    Pages 167-171
  7. Jørgen Vitting Andersen, Andrzej Nowak
    Pages 173-179
  8. Back Matter
    Pages 181-185

About this book

Introduction

This introductory text is devoted to exposing the underlying nature of price formation in financial markets as a predominantly sociological phenomenon that relates individual decision-making to emergent and co-evolving social and financial structures.
 
Two different levels of this sociological influence are considered: First, we examine how price formation results from the social dynamics of interacting individuals, where interaction occurs either through the price or by direct communication.  Then the same processes are revisited and examined at the level of larger groups of individuals.  
 
In this book, models of both levels of socio-finance are presented, and it is shown, in particular, how complexity theory provides the conceptual and methodological tools needed to understand and describe such phenomena. Accordingly, readers are first given a broad introduction to the standard economic theory of rational financial markets and will come to understand its shortcomings with the help of concrete examples. Complexity theory is then introduced in order to properly account for behavioral decision-making and match the observed market dynamics.

This book is conceived as a primer for newcomers to the field, as well as for practitioners seeking new insights into the field of complexity science applied to socio-economic systems in general, and financial markets and price formation in particular.

Keywords

Behavioral finance Economic theory and financial crisis Econophysics of financial markets Financial market complexity Psychosocial decision making

Authors and affiliations

  • Jørgen Vitting Andersen
    • 1
  • Andrzej Nowak
    • 2
  1. 1.CNRS; Centre d'Économie de la SorbonneUniversity of Paris 1ParisFrance
  2. 2.Faculty of PsychologyUniversity of WarsawWarsawPoland

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-642-41944-7
  • Copyright Information Springer Berlin Heidelberg 2013
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Business and Economics
  • Print ISBN 978-3-642-41943-0
  • Online ISBN 978-3-642-41944-7
  • About this book