Human Behavior and the Efficiency of the Financial System
59 Pages Posted: 20 Jul 2000 Last revised: 4 Dec 2022
Date Written: January 1998
Abstract
Recent literature in empirical finance is surveyed in its relation to underlying behavioral principles, principles which come primarily from psychology, sociology and anthropology. The behavioral principles discussed are: prospect theory, regret and cognitive dissonance mental compartments, overconfidence, over- and underreaction, representativeness heuristic disjunction effect, gambling behavior and speculation, perceived irrelevance of history thinking, quasi-magical thinking, attention anomalies, the availability heuristic contagion, and global culture.
Suggested Citation: Suggested Citation
Shiller, Robert J., Human Behavior and the Efficiency of the Financial System (January 1998). NBER Working Paper No. w6375, Available at SSRN: https://ssrn.com/abstract=226124
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