{"product_id":"behavioral-finance-isbn-9781118300190","title":"Behavioral Finance","description":"\u003cb\u003eAn in-depth look into the various aspects of behavioral finance\u003c\/b\u003e  \u003cp\u003eBehavioral finance applies systematic analysis to ideas that have long floated around the world of trading and investing. Yet it is important to realize that we are still at a very early stage of research into this discipline and have much to learn. That is why Edwin Burton has written \u003ci\u003eBehavioral Finance: Understanding the Social, Cognitive, and Economic Debates.\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eEngaging and informative, this timely guide contains valuable insights into various issues surrounding behavioral finance. Topics addressed include noise trader theory and models, research into psychological behavior pioneered by Daniel Kahneman and Amos Tversky, and serial correlation patterns in stock price data. Along the way, Burton shares his own views on behavioral finance in order to shed some much-needed light on the subject.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eDiscusses the Efficient Market Hypothesis (EMH) and its history, and presents the background of the emergence of behavioral finance\u003c\/li\u003e \u003cli\u003eExamines Shleifer's model of noise trading and explores other literature on the topic of noise trading\u003c\/li\u003e \u003cli\u003eCovers issues associated with anomalies and details serial correlation from the perspective of experts such as DeBondt and Thaler\u003c\/li\u003e \u003cli\u003eA companion Website contains supplementary material that allows you to learn in a hands-on fashion long after closing the book\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eIn order to achieve better investment results, we must first overcome our behavioral finance biases. This book will put you in a better position to do so.\u003c\/p\u003e \u003cp\u003ePreface xi\u003c\/p\u003e \u003cp\u003eIntroduction 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One Introduction to Behavioral Finance\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 What Is the Efficient Market Hypothesis? 5\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eInformation and the Efficient Market Hypothesis 6\u003c\/p\u003e \u003cp\u003eRandom Walk, the Martingale Hypothesis, and the EMH 8\u003c\/p\u003e \u003cp\u003eFalse Evidence against the EMH 11\u003c\/p\u003e \u003cp\u003eWhat Does It Mean to Disagree with the EMH? 13\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 The EMH and the “Market Model” 15\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk and Return—the Simplest View 15\u003c\/p\u003e \u003cp\u003eThe Capital Asset Pricing Model (CAPM) 18\u003c\/p\u003e \u003cp\u003eSo What Is the Market Model? 23\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 The Forerunners to Behavioral Finance 25\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Folklore of Wall Street Traders 26\u003c\/p\u003e \u003cp\u003eThe Birth of Value Investing: Graham and Dodd 28\u003c\/p\u003e \u003cp\u003eFinancial News in a World of Ubiquitous Television and Internet 29\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Noise Traders\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Noise Traders and the Law of One Price 33\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Law of One Price and the Case of Fungibility 33\u003c\/p\u003e \u003cp\u003eNoise 38\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 The Shleifer Model of Noise Trading 43\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Key Components of the Shleifer Model 44\u003c\/p\u003e \u003cp\u003eResults 49\u003c\/p\u003e \u003cp\u003eWhy the Shleifer Model Is Important 50\u003c\/p\u003e \u003cp\u003eResolving the Limits to Arbitrage Dispute 51\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Noise Trading Feedback Models 53\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Hirshleifer Model 53\u003c\/p\u003e \u003cp\u003eThe Subrahmanyam-Titman Model 58\u003c\/p\u003e \u003cp\u003eConclusion 62\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Noise Traders as Technical Traders 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTechnical Traders as Noise Traders 67\u003c\/p\u003e \u003cp\u003eHerd Instinct Models 72\u003c\/p\u003e \u003cp\u003eConclusion 76\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart III Anomalies\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 The Rational Man 81\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eConsumer Choice with Certainty 81\u003c\/p\u003e \u003cp\u003eConsumer Choice with Uncertainty 84\u003c\/p\u003e \u003cp\u003eThe Allais Paradox 90\u003c\/p\u003e \u003cp\u003eConclusion 92\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Prospect Theory 93\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Reference Point 93\u003c\/p\u003e \u003cp\u003eThe S-Curve 94\u003c\/p\u003e \u003cp\u003eLoss Aversion 96\u003c\/p\u003e \u003cp\u003eProspect Theory in Practice 98\u003c\/p\u003e \u003cp\u003eDrawbacks of Prospect Theory 98\u003c\/p\u003e \u003cp\u003eConclusion 100\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Perception Biases 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSaliency 101\u003c\/p\u003e \u003cp\u003eFraming 103\u003c\/p\u003e \u003cp\u003eAnchoring 106\u003c\/p\u003e \u003cp\u003eSunk Cost Bias 108\u003c\/p\u003e \u003cp\u003eConclusion 109\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Inertial Effects 111\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEndowment Effect 111\u003c\/p\u003e \u003cp\u003eStatus Quo Effect 116\u003c\/p\u003e \u003cp\u003eDisposition Effect 119\u003c\/p\u003e \u003cp\u003eConclusion 120\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Causality and Statistics 123\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRepresentativeness 123\u003c\/p\u003e \u003cp\u003eConjunction Fallacy 127\u003c\/p\u003e \u003cp\u003eReading into Randomness 129\u003c\/p\u003e \u003cp\u003eSmall Sample Bias 131\u003c\/p\u003e \u003cp\u003eProbability Neglect 133\u003c\/p\u003e \u003cp\u003eConclusion 134\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Illusions 135\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIllusion of Talent 135\u003c\/p\u003e \u003cp\u003eIllusion of Skill 138\u003c\/p\u003e \u003cp\u003eIllusion of Superiority 139\u003c\/p\u003e \u003cp\u003eIllusion of Validity 141\u003c\/p\u003e \u003cp\u003eConclusion 142\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart IV Serial Correlation\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Predictability of Stock Prices: Fama-French Leads the Way 147\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTesting the Capital Asset Pricing Model 147\u003c\/p\u003e \u003cp\u003eA Plug for Value Investing 149\u003c\/p\u003e \u003cp\u003eMean Reversion—The DeBondt-Thaler Research 151\u003c\/p\u003e \u003cp\u003eWhy Fama-French Is a Milestone for Behavioral Finance 152\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Fama-French and Mean Reversion: Which Is It? 155\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Month of January 155\u003c\/p\u003e \u003cp\u003eIs This Just About Price? 157\u003c\/p\u003e \u003cp\u003eThe Overreaction Theme 157\u003c\/p\u003e \u003cp\u003eLakonishok, Shleifer, and Vishny on Value versus Growth 158\u003c\/p\u003e \u003cp\u003eIs Overreaction Nothing More Than a “Small Stock” Effect? 159\u003c\/p\u003e \u003cp\u003eDaniel and Titman on Unpriced Risk in Fama and French 164\u003c\/p\u003e \u003cp\u003eSumming Up the Contrarian Debate 165\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Short Term Momentum 167\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePrice and Earnings Momentum 167\u003c\/p\u003e \u003cp\u003eEarnings Momentum—Ball and Brown 168\u003c\/p\u003e \u003cp\u003eMeasuring Earnings Surprises 170\u003c\/p\u003e \u003cp\u003eWhy Does It Matter Whether Momentum Is Price or Earnings Based? 173\u003c\/p\u003e \u003cp\u003eHedge Funds and Momentum Strategies 174\u003c\/p\u003e \u003cp\u003ePricing and Earnings Momentum—Are They Real and Do They Matter? 174\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 Calendar Effects 177\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eJanuary Effects 178\u003c\/p\u003e \u003cp\u003eThe Other January Effect 180\u003c\/p\u003e \u003cp\u003eThe Weekend Effect 181\u003c\/p\u003e \u003cp\u003ePreholiday Effects 182\u003c\/p\u003e \u003cp\u003eSullivan, Timmermann, and White 183\u003c\/p\u003e \u003cp\u003eConclusion 184\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart V Other Topics\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 The Equity Premium Puzzle 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMehra and Prescott 187\u003c\/p\u003e \u003cp\u003eWhat About Loss Aversion? 190\u003c\/p\u003e \u003cp\u003eCould This Be Survivor Bias? 191\u003c\/p\u003e \u003cp\u003eOther Explanations 192\u003c\/p\u003e \u003cp\u003eAre Equities Always the Best Portfolio for the Long Run? 193\u003c\/p\u003e \u003cp\u003eIs the Equity Premium Resolved? 194\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Liquidity 195\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Securities Market Is a Bid-Ask Market 196\u003c\/p\u003e \u003cp\u003eMeasuring Liquidity 197\u003c\/p\u003e \u003cp\u003eIs Liquidity a Priced Risk for Common Stocks? 199\u003c\/p\u003e \u003cp\u003eSignificance of Liquidity Research 200\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20 Neuroeconomics 201\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCapuchin Monkeys 201\u003c\/p\u003e \u003cp\u003eInnateness Versus Culture 203\u003c\/p\u003e \u003cp\u003eDecisions Are Made by the Brain 203\u003c\/p\u003e \u003cp\u003eDecisions versus Outcomes 205\u003c\/p\u003e \u003cp\u003eNeuroeconomic Modeling 206\u003c\/p\u003e \u003cp\u003eMore Complicated Models of Brain Activity 208\u003c\/p\u003e \u003cp\u003eThe Kagan Critique 208\u003c\/p\u003e \u003cp\u003eConclusion 209\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21 Experimental Economics 211\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBubble Experiments 212\u003c\/p\u003e \u003cp\u003eEndowment Effect and Status Quo Bias 215\u003c\/p\u003e \u003cp\u003eCalendar Effects 216\u003c\/p\u003e \u003cp\u003eConclusion 216\u003c\/p\u003e \u003cp\u003eConclusion And the Winner Is? 217\u003c\/p\u003e \u003cp\u003eThe Semi-Strong Hypothesis—Prices Accurately Summarize All Known Public Information 217\u003c\/p\u003e \u003cp\u003eCan Prices Change if Information Doesn’t Change? 219\u003c\/p\u003e \u003cp\u003eIs the Law of One Price Valid? 220\u003c\/p\u003e \u003cp\u003eThree Research Agendas 221\u003c\/p\u003e \u003cp\u003eThe Critics Hold the High Ground 223\u003c\/p\u003e \u003cp\u003eWhat Have We Learned? 223\u003c\/p\u003e \u003cp\u003eWhere Do We Go From Here? (What Have We Not Learned?) 227\u003c\/p\u003e \u003cp\u003eA Final Thought 230\u003c\/p\u003e \u003cp\u003eIndex 231\u003c\/p\u003e   \u003cp\u003e\u003cb\u003eEDWIN T. BURTON\u003c\/b\u003e is a Professor of Economics at the University of Virginia, where he has taught behavioral finance to more than 1,800 students in the past six years. He is an active investment consultant for pension funds and endowments and is a Trustee of the Virginia Retirement System. Burton's Wall Street history includes senior positions at Smith Barney, Rothschild Inc., and Interstate\/Johnson Lane. He has been an economics professor since 1969 including eleven years on the faculty at Cornell University. Burton currently serves on two public company boards (SL Green Realty Corporation and Virginia National Bank) and numerous private company boards. He first joined the faculty at the University of Virginia in 1988. Burton received his doctorate from Northwestern University in economics and his undergraduate degree in economics from Rice University. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eSUNIT N. SHAH\u003c\/b\u003e's experience in finance includes seven years of financial modeling for Life Settlement Consulting and Management, a position at Stanfield Capital Partners modeling movements of credit spreads, and corporate finance analysis at the Boston Consulting Group for a billion-dollar household products company. Prior work also includes founder's roles in both a dot com and a financial start-up as well as consulting for firms such as Investure, LLC and the CFA Institute. Over the past ten years, Shah has taught a number of introductory, intermediate, and advanced undergraduate economics courses in microeconomics, statistics, and finance. Shah received his doctorate in economics as well as his bachelor's in mathematics and economics from the University of Virginia.     \u003c\/p\u003e\u003cp\u003eBehavioral finance applies systematic analysis to ideas that have long existed in the world of trading and investing. However, it is important to realize that we are still at a very early stage of research into this discipline and have much to learn. In \u003ci\u003eBehavioral Finance: Understanding the Social, Cognitive, and Economic Debates,\u003c\/i\u003e Edwin Burton and Sunit Shah put behavioral finance under the microscope to help you gain a better understanding of the various aspects of this subset of behavioral economics. \u003c\/p\u003e\u003cp\u003eEngaging and informative, this timely guide contains valuable insights into various issues surrounding behavioral finance. Burton and Shah examine the psychological research pioneered by Kahneman and Tversky—including anomalies such as consumer choice with certainity and uncertainity, perception biases, and reading into randomness—that underlies behavior in financial markets. They discuss the Efficient Market Hypothesis (EMH), summarize its history, and present the background of the emergence of behavioral finance. The book also explores the key components of Shleifer's model of noise trading and explains the importance of this model in the larger context of behavioral finance. Burton and Shah include essential information on noise traders and the law of one price as well as the case of fungibility. The book also contains an exploration of noise trading feedback models such as the Hirshleifer model. \u003c\/p\u003e\u003cp\u003eFurther, \u003ci\u003eBehavioral Finance\u003c\/i\u003e reviews serial correlation patterns in stock price data from the perspective of experts such as DeBondt and Thaler. The book puts the Capital Asset Pricing Model to the test and reveals why Fama-French is a milestone for behavioral finance. Along the way, Burton and Shah share their own views on this important area of finance and shed some much needed light on the subject.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988800618725,"sku":"NP9781118300190","price":100.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118300190.jpg?v=1761781640","url":"https:\/\/k12savings.com\/es\/products\/behavioral-finance-isbn-9781118300190","provider":"K12savings","version":"1.0","type":"link"}