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Financial markets are complex. Regulators strive to predict ways in which they can malfunction and create rules to prevent this from happening, yet behavioural impacts are often overlooked. This book explores how behavioural finance can go hand-in-hand with traditional methods to help banks and regulators create better policies. It also demonstrates how the behavioural finance revolution has opened the way to a more integrated approach to the analysis of economic phenomena.
There is no doubt that behavioral economics is becoming a dominant lens through which we think about economics. Behavioral economics is not a single school of thought but representative of a range of approaches, and uniquely, this volume presents an overview of them. The wide spectrum of international contributors each provides an exploration of a central approach, aspect or topic in behavorial economics. Taken together, the whole volume provides a comprehensive overview of the subject which considers both key developments and future possibilities. Part One presents several different approaches to behavioural economics, including George Katona, Ken Boulding, Harvey Leibenstein, Vernon Smith,...
A Fast and Frugal Finance: Bridging Contemporary Behavioural Finance and Ecological Rationality adds psychological reality to classical financial reasoning. It shows how financial professionals can reach better and quicker decisions using the 'fast and frugal' framework for decision-making, adding dramatically to time and outcome efficiency, while also retaining accuracy. The book provides the reader with an adaptive toolbox of heuristic tools and classification systems to aid real-world decisions. Throughout, financial applications are presented alongside real-world examples to help readers solve established problems in finance, including stock buying and selling decisions, when faced with not only risk but fundamental uncertainty. The book concludes by describing potential solutions to financial problems in the forefront of contemporary debates, and calls for taking psychological insights seriously.
This innovative book explores how the design of financial education programmes could benefit from the findings of behavioural economics and finance and cognitive sciences. It covers the social, cultural and technological determinants of financial education, the role of the banking system in promoting financial literacy, and how governments and regulatory authorities are dealing with financial education and risk literacy programmes in schools.
People often confuse intuition with a sixth sense or the arbitrary judgments of inept decision makers. In this book, Gerd Gigerenzer analyzes the war on intuition in the social sciences beginning with gendered perceptions of intuition as female, followed by opposition between biased intuition and logical rationality, popularized in two-system theories. Technological paternalism amplifies these views, arguing that human intuition should be replaced by perfect algorithms. In opposition to these beliefs, this book proposes that intuition is a form of unconscious intelligence based on years of experience that evolved to deal with uncertain and dynamic situations where logic and big data algorithms are of little benefit. Gigerenzer introduces the scientific study of intuition and shows that intuition is not irrational caprice but is instead based on smart heuristics. Researchers, students, and general readers with an interest in decision making, heuristics and biases, cognitive psychology, and behavioral public policy will benefit.
This book will serve as a practical guide for entrepreneurs and investors/advisors in constructing and understanding valuations of startups in rapidly shifting industries, including the areas of drug development, medical devices, cyber security, and renewable energy. For large companies, valuation is based on forecasts of free cash flow; in technologically-driven industries, product pipelines can represent a large part of market capitalization. The situation is even more critical for small companies committed to a single idea: all of their value is linked to a single project. Any business transaction or internal proposal to begin or terminate an R&D project in which innovative projects are b...
Some economic events are so major and unsettling that they “change everything.” Such is the case with the financial crisis that started in the summer of 2007 and is still a drag on the world economy. Yet enough time has now elapsed for economists to consider questions that run deeper than the usual focus on the immediate causes and consequences of the crisis. How have these stunning events changed our thinking about the role of the financial system in the economy, about the costs and benefits of financial innovation, about the efficiency of financial markets, and about the role the government should play in regulating finance? In Rethinking the Financial Crisis, some of the nation’s mo...
This book builds a compelling case for integrating evolutionary biology into undergraduate and postgraduate medical education, as well as its intrinsic value to medicine. It achieves this within the broader context of medicine but through the focused lens of maternal and child health.
It is widely known that – at least in current societies - culture depends on money. Less attention has been given to the contrary fact: money also depends on culture. In its very foundation - negotiations, values, exchanges, debts and obligations, contracts and laws – money's functioning is tied to cultural practices, institutions, identities, and meanings. This interdisciplinary anthology scrutinizes the two-way connection between culture and money, and its implications for economic theory. In this book a wide range of established experts and newcomers from a range of disciplines investigate current economic issues from the perspective of their social and cultural embeddedness, their cu...