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The paper draws on the key themes raised at a Round Table discussion on behavioural finance attended by academics and practitioners. The paper provides a background to the…
The paper draws on the key themes raised at a Round Table discussion on behavioural finance attended by academics and practitioners. The paper provides a background to the key aims of behavioural finance research and the development of the discipline over time. The purpose of this paper is to indicate some future research issues on behavioural finance that emanate from the financial crisis and highlight areas of mutual benefit to both behavioural finance academics and the finance industry so as to encourage a creative cross‐fertilisation.
The paper draws on a Round Table discussion on behavioural finance that was organized by the Behavioural Finance Working Group, the Centre for the Study of Financial Innovation and Financial Services Knowledge Transfer Network.
The paper highlights numerous benefits that behavioural finance research can contribute to the financial industry, but at the same time there is an evident discrepancy between the academic and the professional world when it comes to utilising behavioural finance research.
The paper highlights several areas where behavioural finance can contribute significant benefits to a wide array of aspects of the finance industry.
The paper seeks to inform behavioural finance issues so as to encourage collaboration between the academic world and finance practitioners. In so doing, the paper aims to encourage a greater awareness of individual decision‐making frames and heuristics and how industry can apply these concepts to improve the allocation of finance products to society.
The paper brings together a wide array of finance professionals and academics to encourage greater collaboration and mutual respect of each others interest in and uses for behavioural finance.
This paper presents an analysis of UK merger policy based upon the allocative effects of Monopoly and Mergers Commission (MMC) decisions. For some time now evidence has…
This paper presents an analysis of UK merger policy based upon the allocative effects of Monopoly and Mergers Commission (MMC) decisions. For some time now evidence has been available concerning the ineffectiveness of MMC decisions in reducing product market concentration (see Simpson and Shaw 1986, 1989). So, if the reduction of market concentration is not a systematic result of decisions of the MMC, it is interesting to ask what have been the discernible effects of the MMC's activities and what revised objectives might be formulated for that body?
The purpose of this cross-national study is to evaluate the communality and differences in experiences and policy responses in the run up to the 2007-2009 credit crisis…
The purpose of this cross-national study is to evaluate the communality and differences in experiences and policy responses in the run up to the 2007-2009 credit crisis and during its critical early stages in Germany, Ireland and the UK. The importance of shared cognitive illusions regarding the power and stability of financial markets is emphasised.
A multiple case study approach is used which draws on publicly available information to trace developments leading up to bank failures (or near failures) and the evolution of government responses drawing upon alternative paradigms used to justify State intervention.
Findings emphasise the role of state regulatory bodies and their response to the crisis as a primary source of the “rules of the game” in financial markets, here it is the “game of bank bargains” and a potential source of repair. Given the degree of interconnectedness, opacity and complexity of financial markets investors/politicians/regulators will fall victim to cognitive biases which affect their decisions.
This case study method allows identification of patterns in decision-makers’ behaviour and yields richer insights than a quantitative approach but is limited in its generalisability.
This paper offers practical implications in suggesting that a pivotal step in effective crisis management requires directly addressing sources of uncertainty, namely, time pressure, complexity and opacity of underlying cause–effect relationships, empowering decision-makers to act responsibly.
This paper is novel in its illustration of the collective cognitive paradigm for justifying regulatory action across three countries using six case studies.
Examines the history of the Commission on Industrial Relations (CIR) 1969‐74 ‐ its origins, organization and policies ‐ and then evaluates its contribution as an agent of…
Examines the history of the Commission on Industrial Relations (CIR) 1969‐74 ‐ its origins, organization and policies ‐ and then evaluates its contribution as an agent of reform in the context of the perceived problems of the 1960s and 1970s. Considers whether there are any lessons to be learnt for the future given the possibility of a Labour Government, developments in Europe and the 1995 TUC policy document Your Voice at Work. Despite the drastic changes in industrial relations and in the economic, political and social environment, the answer is in the affirmative. In particular, the importance of a new third‐party agency having an independent governing body like the CIR and not a representative body like the Advisory, Conciliation and Arbitration Service (ACAS); in its workflow not being controlled by government; and in its decisions on recognition being legally enforceable.
Briefly reviews previous literature by the author before presenting an original 12 step system integration protocol designed to ensure the success of companies or…
Briefly reviews previous literature by the author before presenting an original 12 step system integration protocol designed to ensure the success of companies or countries in their efforts to develop and market new products. Looks at the issues from different strategic levels such as corporate, international, military and economic. Presents 31 case studies, including the success of Japan in microchips to the failure of Xerox to sell its invention of the Alto personal computer 3 years before Apple: from the success in DNA and Superconductor research to the success of Sunbeam in inventing and marketing food processors: and from the daring invention and production of atomic energy for survival to the successes of sewing machine inventor Howe in co‐operating on patents to compete in markets. Includes 306 questions and answers in order to qualify concepts introduced.
This paper seeks to investigate the usefulness of analysts’ earnings forecast revisions in the allocation of funds to different industries and countries. In particular, it…
This paper seeks to investigate the usefulness of analysts’ earnings forecast revisions in the allocation of funds to different industries and countries. In particular, it asks whether a post analyst revision announcement drift in prices can be exploited to guide an asset allocation strategy based on industry, or country, selection.
The methodolgy is to use monthly consensus I/B/E/S – First Call analysts’ earnings forecasts for companies listed on the main European stock markets over the period January 1987 to December 2001.
It is found that a significant post revision announcement effect for individual companies. However, the abnormal returns evaporate away as the research moves from an individual company level to an industry or country level. The paper provides two kinds of evidence which seem to cast doubt on the analysts’ ability to fully incorporate industry and country specific information into their forecasts: returns are driven more by common components than earnings forecast revisions, and company specific news reflected by the revision signal dominates industry or country news.
Locates the origin of stock price momentum strategies in news about earnings reflected in analysts’ forecasts revisions.