From Market Anomalies to Behavioural Finance
From Market Anomalies to Behavioural Finance
From Market Anomalies to Behavioural Finance
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<strong>Behavioural</strong> <strong>Finance</strong> on the Offensive<br />
• Limits of arbitrage<br />
• Experimental evidence from cognitive<br />
psychologists on the systematic biases that arise<br />
when people form belief, or make preference<br />
– Overconfidence<br />
– Wishful thinking<br />
– Representativeness (relying on stereotype)<br />
– Conservatism
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