Emerging Research and Policy Issues in Behavioral Finance (Presentation Slides)
Bentley University – Department of Finance
Goucher College – Department of Business Management
Up-and-Coming Small- and Mid-cap Portfolio Managers #MICUS (Morningstar Conference)
September 18, 2015
Seventh Annual Meeting of the Academy of Behavioral Finance & Economics, September 2015
This is a PDF file of ‘Emerging Research and Policy Issues in Behavioral Finance” slides from a presentation at the Seventh Annual Meeting of the Academy of Behavioral Finance & Economics, September 16-18, 2015, Drexel University Philadelphia, Pennsylvania.
This special session provided conference attendees a presentation and discussion of emerging issues in behavioral finance.
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Emerging Research And Policy Issues In Behavioral Finance
- Behavioral finance hypotheses
- Framing issues
- Mental accounting
- Subconscious decision-making and affective reactions
- Behavioral CAPM and behavioral portfolio theory
- Financial Sustainability and Social Investing: Can behavioral finance develop an alternative to shareholder maximization?
- Impact Investing
- Concept of “fiduciary capitalism”
- Social Psychology: The role of risk-taking and group behavior.
- Risky Shift Effect
- Groupthink and the Delphi Method
- Change in the sociological frame since 2008
- Role of gender, culture, ethnicity, religion
- Financial therapy and investor (money) personality.
- Role of trust
- Financial Literacy
- The Performance Gap: Investor education and poor investment performance (Source: Dalbar report)
- Role of age in financial decision-making
- Role of emotional intelligence
- Nudging Policy
- Behavioral finance conference hosted by the RAND Corporation each year demonstrates a wide range of governmental nudging programs and policies.
- What type of framework and guidelines should be created to assess the implementation of nudging policies by the government?
- Prize-linked savings accounts (lottery-linked accounts).
- Is nudging and retirement savings a good idea?
- What influence would investor education and a required meeting with a financial planner have?
- Perceptions of the “market”
- What/who constitutes the market? Where is the power?
- Role of algorithmic trading
- The inverse relationship between perceived risk and return
- The relationship between risk tolerance and risk perception
- Compare two different research groups
- “Status Quo Investors” versus “Overconfident Investors”
- What behavioral biases are unique to specific financial services and investment products?
- Application: What are strategies for overcoming biases?
- Survey overview from literature covering different branches of behavioral finance
- Need for academic articles and books on research methods in behavioral finance.
- E.g., Kent Baker published the first book in 2010 on survey research and corporate finance.
- Behavioral accounting has a wonderful body of knowledge on behavioral research methods within an accounting setting from the late 1960s and early 1970s.
- An under-utilized research approach in behavioral finance is the notion of replication.
See the full slides below.