7. Behavioral Finance: The Role of PsychologyBackFinancial Markets (ECON 252) Behavioral Finance is a relatively recent revolution in finance that applies insights from all of the social sciences to finance. New decision-making models incorporate psychology and sociology, among other disciplines, to explain economic and financial phenomenon, such as erratic stock price variations. Psychological patterns such as overconfidence and perceived kinks in the value function seem to impact financial decision-making, but are not included in classical theories such as the Expected Utility Theory. Kahneman and Tversky's Prospect Theory addresses such issues and sheds light on irrational deviations from traditional decision-making models. Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses This course was recorded in Spring 2008. Category: Education Uploaded: November 20th, 2008 @ 1:09 am Author: YaleCourses Length: 05:10 Rating: Views: Tags: behavioral economics finance confidence intervals expected utility theory kahneman overconfidence prospect regret tversky function value Related Video Links:» View Video Comments For 7. Behavioral Finance: The Role of Psychology » View YaleCourses's Other Uploaded Videos Video Thumbnails:Video Embedding Code:* Embed this video on your website, social bookmark, myspace, or blog. |
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