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Behavioural Finance Then and Now

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Effective Investments on Capital Markets

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Abstract

Behavioural finance, a relatively new field that is constantly developing, has grown up to criticize the assumptions and theories of standard finance. The aim of this article is to present the development of behavioural finance of the first and the second generation. The first generation of behavioural finance focused on the analysis of irrational decisions made by rational actors. The second generation of behavioural finance considers the decision-making processes of normal people. Its further development will be based on the achievements of neuroeconomics.

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Notes

  1. 1.

    Short history of research and description of studies related to behavioural finances in the period 1896–2009 were presented by Sewell [22]. Presentation of newer research, the results of which were published by 2014, can be found in [7].

  2. 2.

    B. Benson divides 200 currently identified cognitive biases into groups, according to four problems they help to solve. These are biases that arise from too much information, not enough meaning, the need to act quickly and the limits of memory [2].

  3. 3.

    These kinds of benefits were described in [29, 30].

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Authors and Affiliations

  1. Department of Economics, Faculty of Economics and Management, Institute of Economy, University of Szczecin, Mickiewicza 64, 71-101, Szczecin, Poland

    Danuta Miłaszewicz

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  1. Danuta Miłaszewicz
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Correspondence to Danuta Miłaszewicz .

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Editors and Affiliations

  1. Department of Insurance and Capital Markets, University of Szczecin, Szczecin, Poland

    Waldemar Tarczyński

  2. Institute of IT in Management, University of Szczecin, Szczecin, Poland

    Kesra Nermend

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Miłaszewicz, D. (2019). Behavioural Finance Then and Now. In: Tarczyński, W., Nermend, K. (eds) Effective Investments on Capital Markets. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-21274-2_25

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