Behavioural Finance
Behavioural finance combines psychology and finance to understand how emotional and psychological factors influence investor behavior and market outcomes. This field challenges traditional financial theories that assume rational decision-making. By examining cognitive biases, such as overconfidence and loss aversion, behavioural finance sheds light on why investors often act irrationally. Understanding these concepts can help in making more informed investment decisions and improving financial strategies. It also provides valuable insights into market anomalies and the impact of emotions on financial markets.
Behavioural Finance
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Presentation Transcript
1. Behavioural Finance Lecture 11
Out of Sequence…
Extending Endogenous Money
2. Recap Last week we built model of pure credit economy:
