ENGLISH

Inefficient markets: an introduction to behavioral finance

By Andrei Shleifer

Book information

Publisher
Oxford University Press
Year
2000
ISBN
9780198292272, 9780198292289, 0198292279, 0198292287, 9780191521928
Open Library ID
OL7399214M
Language
english
Format
DJVU
Filesize
1 MB (1306401 bytes)
Series
Clarendon lectures in economics
Pages
225\225
Library
Kolxo3
DPI
300
Scanned
yes
Time added
2009-07-20 03:45:11

Description

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 models of such markets. These models explain the available financial data more accurately than the efficient markets hypothesis, and generate new predictions about security prices. 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.

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