BUSI 4502 Lecture Notes - Lecture 5: Behavioral Economics

• School: Carleton University
• Department: Business
• Course: BUSI 4502
• Professor: Bill Lawson

Document Summary

Article 16 behavioral finance and its implications for stock-price volatility. Behavioral finance, which is a category of social science, is known as a recent controversy and evolution in finance field. Previous studies have shown the potential application of new behavioral finance findings. However, few authors have offered a full (cid:494)map(cid:495) for investors to understand better about the behavior finance. Hence, the purposes of this article are listed below: present a complete picture of the origin, content or rationale behind the behavioral finance, provide example of how behavioral finance can be value for understanding financial market. The earliest financial research of behavioral finance is regarding the need for construction of laboratory experiments to test theories back in 1951. Coincidently, the modern or standard of finance also had its first research in 1951. However, it is only until late 1980s, where more researches gain interest in behavioral finance.