Review on behavioral economics and behavioral finance
Studies in Economics and Finance
ISSN: 1086-7376
Article publication date: 19 June 2020
Issue publication date: 19 June 2020
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
Acknowledgements
The author would like to thank the Editor, Professor Niklas Wagner for his advice to improve this manuscript significantly. The author would also like to thank Professor Robert B Miller and Professor Howard E Thompson for their continuous guidance and encouragement. For financial and research support, the author acknowledges Asia University, China Medical University Hospital, The Hang Seng University of Hong Kong, the Research Grants Council of Hong Kong (Project Numbers 202809, 12502814 and 12500915) and Ministry of Science and Technology (MOST, Project Numbers 106–2410-H-468–002 and 107–2410-H-468–002-MY3), Taiwan.
Citation
Wong, W.-K. (2020), "Review on behavioral economics and behavioral finance", Studies in Economics and Finance, Vol. 37 No. 4, pp. 625-672. https://doi.org/10.1108/SEF-10-2019-0393
Publisher
:Emerald Publishing Limited
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