Behavioral Finance / Behavioral Economics
(the new frontiers of Finance and Economics)
BE / BF Glossary
A transcendental question before starting:
when money is at stake, can somebody be really rational?
Definition of Behavioral finance / Behavioral economics,
and content of this website section
Behavioral Finance (BF) and
Behavioral Economics (BE) are
the application of individual and collective psychology
to finance, and to economics (*).
(*) Click here for a short description of economics and finance.
Behavioral finance and behavioral economics study how we
behave with money, production, work, spending, investment...
BF/BE is based on several types of researches, which deal with various
subfields such as:
Behavioral finance / economics micro
aka "Psychological behavioral finance"
or more simply "Financial psychology".
How investors make choices
And, as part of this decision process,
investor behavioral biases / errors,
Financial / economic behaviors
and money attitudes in general,
which often are not fully rational,
In savings, borrowing, insuring, tax management, gambling...
Behavioral finance / economics macro
aka "Quantitative behavioral finance". It studies:
The effects of those behaviors on financial markets, and more
generally on the economy, such as
anomalies & inefficiencies on asset prices and returns.
BF tries to detect and understand those biases / anomalies,
and if possible to use them in investment strategies.
To find more complete definitions of BF, please look at the links
in chapter 2. below.
This section of our website gives an extensive range of information and education
items on this financial / economic topic.
Here are the categories of contents:
1. PURPOSE and TOPICS of our Behavioral Finance group
2. Our free BF GALLERY: synthesis / glossary / FAQ / contributions
3. A behavioral stock pricing tool: the STOCK IMAGE
4. A mine of interesting RELATED SITE
5. AUTHORS & BOOKS on Behavioral Finance
1. PURPOSE and TOPICS of our free Behavioral Finance group
We share information and opinions on financial approaches
going beyond the "efficient market hypothesis" shortcomings.
Our main information / discussion topics are:
Market inefficiencies, price and return distortions, bubbles and crashes
Investor biases, irrational investment decisions,
investor styles, investor sentiment
Reactions to information, manipulations
Behavioral or experimental finance and economics
Investment models based on investor behavior,
Some incursions in related nonlinear market analysis...
Administrative (public, corporate, managerial) behavior / governance
More details about our discussion topics can be found at: BF Group description
2. Your free GALLERY: Behavioral Finance / economics glossary / FAQ
Synthesis and contributions on BF
FAQ / Glossary / dictionary / encyclopedia
( 500+ Behavioral finance / Behavioral economics definitions,
many as full articles, constantly completed and updated! )
A short presentation of Behavioral finance
in our Main BF concepts tables
A bit more detailed general approach of BF essentials
in our B-F synthesis pages
You can also do a comprehensive Word Search:
Or in our group messages: 1)click Behavioral-Finance group,
2) click "messages", 3)enter your query in "search archives"
See also Martin Sewell's treasure chest of academic
All members are welcome to send their contributions
to enhance our collective encyclopedia.
Post to the Behavioral-Finance group
(if you are already a member)
3. The PRACTICAL CORNER:
An exclusive BEHAVIORAL STOCK PRICING TOOL:
the "Stock image" + some practical investor precaution tips
To find all details on the "Stock image" stock pricing tool,
click Behavioral Finance & Stock Image (my site's front door)
Or, if you are already familiar with the method, click
Stockpricer to use our calculator to do a stock valuation.
For investor practical precaution tips (protection against biased
behaviors) see bfpractice
4. A mine of interesting RELATED SITES, just a click away:
Or this website's "links" (a broader choice
of financial sites, not only on BF)
Not to forget financial articles written by the
author for the Knol Google encyclopedia
(also, a page under preparation to give a list of
universities with BF courses)