Early Evidence of “Finance for Normal People” in the First Era of Globalization

Maxime Merli and Antoine Parent ()
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Maxime Merli: LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg
Antoine Parent: IXXI - Institut Rhône-Alpin des systèmes complexes - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - INSA Lyon - Institut National des Sciences Appliquées de Lyon - Université de Lyon - INSA - Institut National des Sciences Appliquées - Inria - Institut National de Recherche en Informatique et en Automatique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes

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Abstract: In this paper, we unearth a forgotten study of Pierre Des Essars, the director of research at the Banque de France in the late 19th century, enriched with comments from contemporary financial analysts. Des Essars provides the first and only existing example of the actual composition of French individual portfolios during the Belle Époque. By revisiting what is generally taught, our analyses show that many of the intuitions of "finance for normal people" were already present in the financial analysts' writings during the Belle Époque. Specifically, we show in an unprecedented way that these writings prefigure behavioral portfolio theory word for word a century before its emergence. In addition, our findings highlight that this popular science of investment was born from observations of individual portfolios and the objective of providing financial education for the masses. Finally, we reveal strong invariants in the construction of behavioral finance versus standard finance a century apart.

Keywords: N23; N20; G15; G14; behavioral portfolio theory | cognitive psychology | finance for normal people | rationality of individual investors JEL Classification: G11; behavioral portfolio theory | cognitive psychology | finance for normal people | rationality of individual investors JEL Classification: G11 G14 G15 N20 N23 (search for similar items in EconPapers)
Date: 2025-01-27
New Economics Papers: this item is included in nep-eur, nep-fdg, nep-his and nep-hpe
Note: View the original document on HAL open archive server: https://univoak.hal.science/hal-05775271v1
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Published in Kyklos, 2025, 78 (2), pp.718 - 728. ⟨10.1111/kykl.12439⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05775271

DOI: 10.1111/kykl.12439

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