Behavioral Finance in Joseph De La Vega’s Confusion De Confusiones

Posted: 13 Sep 2012  

M. Teresa Corzo

Universidad Pontificia Comillas

Margarita Prat

affiliation not provided to SSRN

Maria Esther Vaquero Lafuente

affiliation not provided to SSRN

Date Written: September 12, 2012

Abstract

In this paper, we link Joseph de la Vega’s work Confusion de Confusiones, written in 1688, with current behavioral finance and propose that Vega be considered the first precursor of modern behavioral finance. In addition to describing excessive trading, overreaction and underreaction, and the disposition effect, Vega vividly portrays how investors behaved three hundred years ago and includes interesting documentation on investor biases, such as herding, overconfidence and regret aversion.

Keywords: behavioral finance, investor biases, stock market history, overconfidence, herding, regret aversion

JEL Classification: G02, G19, B19

Suggested Citation

Corzo, M. Teresa and Prat, Margarita and Vaquero Lafuente, Maria Esther, Behavioral Finance in Joseph De La Vega’s Confusion De Confusiones (September 12, 2012). Available at SSRN: https://ssrn.com/abstract=2145343 or http://dx.doi.org/10.2139/ssrn.2145343

M. Teresa Corzo (Contact Author)

Universidad Pontificia Comillas ( email )

Spain
915422800 (Phone)
91 5596569 (Fax)

Margarita Prat

affiliation not provided to SSRN ( email )

Maria Esther Vaquero Lafuente

affiliation not provided to SSRN ( email )

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