The efficient markets hypothesis has been the central proposition in finance for nearly thirty years. It states that securities prices in financial markets must equal fundamental values, either because all investors are rational or because arbitrage eliminates pricing anomalies.

This book describes an alternative approach to the study of financial markets: behavioral finance. This approach starts with an observation that the assumptions of investor rationality and perfect arbitrage are overwhelmingly contradicted by both psychological and institutional evidence. In actual financial markets, less than fully rational investors trade against arbitrageurs whose resources are limited by risk aversion, short horizons, and agency problems. The book presents and empirically evaluates models of such inefficient markets.

Behavioral finance models both explain the available financial data better than does the efficient markets hypothesis and generate new empirical predictions. These models can account for such anomalies as the superior performance of value stocks, the closed end fund puzzle, the high returns on stocks included in market indices, the persistence of stock price bubbles, and even the collapse of several well-known hedge funds in 1998. By summarizing and expanding the research in behavioral finance, the book builds a new theoretical and empirical foundation for the economic analysis of real-world markets.

• We started tracking this book on December 21, 2013.
• This book was $22.99 when we started tracking it.
• The price of this book has changed 91 times in the past 3,972 days.
• The current price of this book is $37.21 last checked one day ago.
• This lowest price this book has been offered at in the past year is $25.98.
• The lowest price to date was $22.99 last reached on December 21, 2013.
• This book has been $22.99 one time since we started tracking it.
• The highest price to date was $43.49 last reached on August 12, 2023.
• This book has been $43.49 one time since we started tracking it.

• Business & Money

• Text-to-Speech: Disabled
• Lending: Disabled
• File Size: 7,585 KB