Review on behavioral economics and behavioral finance

Wing-Keung Wong

Studies in Economics and Finance, 2020, vol. 37, issue 4, 625-672

Abstract: Purpose - This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable risk measures, diversification strategies and portfolio optimization. Design/methodology/approach - The authors also cover related disciplines such as trading rules, contagion and various econometric aspects. Findings - While scholars could first develop theoretical models in behavioral economics and behavioral finance, they subsequently may develop corresponding statistical and econometric models, this finally includes simulation studies to examine whether the estimators or statistics have good power and size. This all helps us to better understand financial and economic decision-making from a descriptive standpoint. Originality/value - The research paper is original.

Keywords: Behavioral finance; Applications; Behavioral economics; Theoretical models; Econometric and statistical models; A10; G00; G31; O32 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:sefpps:sef-10-2019-0393

DOI: 10.1108/SEF-10-2019-0393

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