Behavioral Finance and Capital Markets: How Psychology Influences Investors and Corporations

Description

Szyszka presents and classifies many of the dynamic arguments being made in the current literature on the topic through the use of a new, ground-breaking methodology termed: the General Behavioral Asset Pricing Model (GBM). GBM describes how asset prices are influenced by various behavioral heuristics and how these prices deviate from fundamental values due to irrational behavior on the part of investors. The connection between psychological factors responsible for irrational behavior and market pricing anomalies is featured extensively throughout the text. Alternative explanations for various theoretical and empirical market puzzles – such as the 2008 U.S. financial crisis – are also discussed in a convincing and interesting manner. The book also provides interesting insights into behavioral aspects of corporate finance.