Behavioral Finance and Capital Markets

How Psychology Influences Investors and Corporations

  • Authors
  • Adam¬†Szyszka

Table of contents

  1. Front Matter
    Pages i-x
  2. Introduction

    1. Adam Szyszka
      Pages 1-5
  3. Foundations

    1. Front Matter
      Pages 7-7
    2. Adam Szyszka
      Pages 37-58
  4. Investor Behavior and Asset Pricing

    1. Front Matter
      Pages 59-59
    2. Adam Szyszka
      Pages 61-85
  5. Aggregate Market Behavior

    1. Front Matter
      Pages 117-117
    2. Adam Szyszka
      Pages 143-168
  6. Behavioral Corporate Finance

    1. Front Matter
      Pages 169-169
    2. Adam Szyszka
      Pages 171-195
    3. Adam Szyszka
      Pages 197-215
    4. Adam Szyszka
      Pages 217-240
  7. Concluding Remarks

    1. Adam Szyszka
      Pages 265-269
  8. Back Matter
    Pages 271-335

About this book

Introduction

Behavioral Finance helps investors understand unusual asset prices and empirical observations originating out of capital markets. At its core, this field of study aids investors in navigating complex psychological trappings in market behavior and making smarter investment decisions. Behavioral Finance and Capital Markets reveals the main foundations underpinning neoclassical capital market and asset pricing theory, as filtered through the lens of behavioral finance. Szyszka presents and classifies many of the dynamic arguments being made in the current literature on the topic through the use of a new, ground-breaking methodology termed: the General Behavioral Asset Pricing Model (GBM). GBM describes how asset prices are influenced by various behavioral heuristics and how these prices deviate from fundamental values due to irrational behavior on the part of investors. The connection between psychological factors responsible for irrational behavior and market pricing anomalies is featured extensively throughout the text. Alternative explanations for various theoretical and empirical market puzzles - such as the 2008 U.S. financial crisis - are also discussed in a convincing and interesting manner. The book also provides interesting insights into behavioral aspects of corporate finance.

Keywords

asset pricing behavioral finance capital capital market Investment psychology

Bibliographic information

  • DOI https://doi.org/10.1057/9781137366290
  • Copyright Information Palgrave Macmillan, a division of Nature America Inc. 2013
  • Publisher Name Palgrave Macmillan, New York
  • eBook Packages Palgrave Economics & Finance Collection
  • Print ISBN 978-1-349-46414-2
  • Online ISBN 978-1-137-36629-0
  • About this book
Industry Sectors
Finance, Business & Banking