Note on Behavioural Finance

內容大綱
Behavioural economics, a relatively new branch of study, formally began in the 1980s and has garnered increasing attention from economists and neuroscientists since. Behavioural finance, a subfield of behavioural economics, attempts to explain financial market–related behaviour. This note introduces behavioural finance by providing an overview of fundamental behavioural economic theories and empirical findings, including more recent findings that have expanded the breadth of the field. It also outlines strategies for correcting irrational financial behaviour.
學習目標
After completion of this note, students will be able to do the following:<ul><li>Describe the fundamental theories on which behavioural finance is based.</li><li>Compare traditional financial models with behavioural finance. </li><li>Understand the limits to arbitrage.</li><li>Identify investor psychology issues, including framing effects, biases, and heuristics.</li><li>Understand the basic premises of prospect theory.</li><li> Describe the biological explanations for irrational investment decisions.</li><li>Explain how to correct irrational financial behaviour.</li><ul>
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