Emerging Research And Policy Issues In Behavioral Finance

Emerging Research And Policy Issues In Behavioral Finance
stevepb / Pixabay

Emerging Research and Policy Issues in Behavioral Finance (Presentation Slides)

Deborah Gregory
Bentley University – Department of Finance

Victor Ricciardi
Goucher College – Department of Business Management

Seth Klarman’s 2021 Letter: Baupost’s “Never-Ending” Hunt For Information

Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More

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.

Note: SSRN is experimenting with enabling the distribution of different types of files: slides, spreadsheets, video, etc. This is an upload of a PDF file of PowerPoint slides. We are interested in our user’s desires to distribute files that go beyond word processing text files. You can communicate with me on these issues via my email address below. We invite you to submit your own presentation slides.

Emerging Research And Policy Issues In Behavioral Finance

  • Behavioral finance hypotheses
    • Framing issues
    • Mental accounting
    • Subconscious decision-making and affective reactions
    • Motivation
  • 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.

Updated on

No posts to display