A Fast and Frugal Finance
Bridging Contemporary Behavioral Finance and Ecological Rationality
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A Fast and Frugal Finance: Bridging Contemporary Behavioural Finance and Ecological Rationality adds psychological reality to classical financial reasoning. It shows how financial professionals can reach better and quicker decisions using the ‘fast and frugal’ framework for decision-making, adding dramatically to time and outcome efficiency, while also retaining accuracy. The book provides the reader with an adaptive toolbox of heuristic tools and classification systems to aid real-world decisions. Throughout, financial applications are presented alongside real-world examples to help readers solve established problems in finance, including stock buying and selling decisions, when faced with not only risk but fundamental uncertainty. The book concludes by describing potential solutions to financial problems in the forefront of contemporary debates, and calls for taking psychological insights seriously.
Key Features
- Demonstrates how well-constructed ‘fast and frugal’ models can outperform standard models in time and outcome efficiency
- Focuses on how financial decisions are made in reality, using heuristics, rather than how such decisions should be made
- Discusses how cognition and the decision-making context interact in producing ‘fast and frugal’ choices that follow ecological rationality
- Explores the development of decision-making trees in finance to aid in decision-making
Readership
Graduate students studying for a degree in finance, accounting, or economics that include a course in behavioral finance or finance, and early career researchers conducting primary research in behavioral finance. Professionals, including finance managers, financial controllers and treasurers
Table of Contents
Section I A Fast-and-Frugal Approach to Finance
1. Introduction
2. Fast-and-Frugal Heuristics
3. Adaptive or Efficient Financial Markets?
4. Financial Regulations and Heuristics
5. When Fast-and-Frugal Works BestSection II Applications of Fast-and-Frugal Finance
6. Fast-and-Frugal Asset Pricing
7. Fast-and-Frugal Portfolio Theory
8. Fast-and-Frugal Financial Analysis
9. Inference Under the Law of Small Numbers: Earnings Streaks Rather Than Earning Numbers
10. A Fast-and-Frugal Finance
Product details
- No. of pages: 276
- Language: English
- Copyright: © Academic Press 2019
- Published: November 15, 2019
- Imprint: Academic Press
- eBook ISBN: 9780128124963
- Paperback ISBN: 9780128124956
About the Authors
William Forbes
William Forbes is a Teaching Associate at Queen Mary University of London. Forbes has researched and taught upon behavioural finance for nearly twenty years. Previously, he has worked in Exeter, Manchester, Glasgow and Loughborough Universities. He is the author of Behavioural Finance (John Wiley & Son, 2009), and co-author of Corporate Governance in the United Kingdom: Past, Present and Future (Springer, 2014).
Affiliations and Expertise
Waterford Institute of Technology, Ireland and Groningen University, The Netherlands
Aloysius Igboekwu
Aloysius Igboekwu is a Lecturer in Finance and the Director of Postgraduate Studies at Aberystwyth Business School, Aberystwyth University, United Kingdom. His research in asset pricing, behavioral finance, corporate finance and governance, and market-based accounting has appeared in international journals. He is a reviewer for the Journal of Risk Finance, and serves as a guest editor for the Qualitative Research in Financial Markets.
Affiliations and Expertise
School of Management and Business, Aberystwyth University, UK
Shabnam Mousavi
Shabnam Mousavi is a fellow at the Max Planck Institute for Human Development in Berlin. She is president of the Society for the Advancement of Behavioral Economics, editor-in-chief for Mind and Society, also, co-editor of the Handbook of Behavioral Economics (Routledge, 2017) and of The Behavioral Finance Revolution: A New Approach to Financial Policies and Regulations (Edward Elgar, 2018).
Affiliations and Expertise
Max Planck Institute for Human Development, Berlin, Germany