Shefrin - Behavioral & Neoclassical asset pricing theories - 2008

Best of Both Worlds
I argue that going forward asset pricing theory
will bring together psychologically-based
assumptions from behavioural finance and the
rigorous, integrated SDF-based methodology
from neoclassical finance.
Behavioural features will improve upon the
neoclassical assumption of perfect rationality.
Neoclassical methodology will improve upon the ad
hoc, fragmented approach that is characteristic of
the current behavioural asset pricing journal
literature.
Copyright Hersh Shefrin 2008
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