BEHAVIORAL FINANCE: ESSENCE AND BASIC THEORETICAL BLOCKS

Behavioral Finance Models and Behavioral Biases in Stock Price Forecasting

Stock market is affected by news and information. If the stock market is not efficient, the reaction of stock price to news and information will place the stock market in overreaction and under-reaction states. Many models have been already presented by using different tools and techniques to forecast the stock market behavior. In this study, the reaction of stock price in the stock market was ...

Mathematical finance: basic models and unsolved problems

Mathematical finance is a relatively new mathematical field. It was in a phase of explosive growth last 10-15 years, and there is very indication it will continue growing for a while yet. The growth is due to a combination of demand from financial institutions and a breakthrough in the mathematical theory of option pricing. The talk will outline basic mathematical theorems and ideas used here, ...

Theoretical Tools of Public Finance

The End of Behavioral Finance

n 1985, Werner De Bondt and I published an article that asked the question: “Does the stock market overreact?” The article was controversial because it gave evidence to support the hypothesis that a cognitive bias (investor overreaction to a long series of bad news) could produce predictable mispricing of stocks traded on the NYSE. Although this idea was hardly shocking to practitioners, the co...

New Insights into Behavioral Finance