Behavioral Finance

16 Pages Posted: 1 Nov 2006

See all articles by Robert J. Bloomfield

Robert J. Bloomfield

Cornell University - Samuel Curtis Johnson Graduate School of Management

Date Written: October 2006

Abstract

Behavioral finance began as an attempt to understand why financial markets react inefficiently to public information. One stream of behavioral finance examines how psychological forces induce traders and managers to make suboptimal decisions, and how these decisions affect market behavior. Another stream examines how economic forces might keep rational traders from exploiting apparent opportunities for profit. Behavioral finance remains controversial, but will become more widely accepted if it can predict deviations from traditional financial models without relying on too many "ad hoc" assumptions.

Suggested Citation

Bloomfield, Robert J., Behavioral Finance (October 2006). Johnson School Research Paper No. 38-06. Available at SSRN: https://ssrn.com/abstract=941491 or http://dx.doi.org/10.2139/ssrn.941491

Robert J. Bloomfield (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

450 Sage Hall
Ithaca, NY 14853
United States
607-255-9407 (Phone)
607-254-4590 (Fax)

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