Financial Behavior: Players, Services, Products, and Markets (Financial Markets and Investments)

"Financial Behavior: Players, Services, Products, and Markets provides a synthesis of the theoretical and empirical literature on the financial behavior of major stakeholders, financial services, investment products, and financial markets. The book offers a different way of looking at financial and emotional well-being and processing beliefs, emotions, and behaviors related to money. The book provides important insights about cognitive and emotional biases that influence various financial decision-makers, services, products, and markets. With diverse concepts and topics, the book brings together noted scholars and practitioners so readers can gain an in-depth understanding about this topic from experts from around the world. In today's financial setting, the discipline of behavioral finance is an ever-changing area that continues to evolve at a rapid pace. This book takes readers through the core topics and issues as well as the latest trends, cutting-edge research developments, and real-world situations. Additionally, discussion of research on various cognitive and emotional issues is covered throughout the book. Thus, this volume covers a breadth of content from theoretical to practical, while attempting to offer a useful balance of detailed and user-friendly coverage. Those interested in a broad survey will benefit as will those searching for more in-depth presentations of specific areas within this field of study. As the seventh book in the Financial Markets and Investment Series, Financial Behavior: Players, Services, Products, and Markets offers a fresh looks at the fascinating area of financial behavior"--The publisher About the editors -- About the contributors -- Abbreviations -- Financial behavior and psychology -- Financial behavior : an overview / H. Kent Baker, Greg Filbeck, and Victor Ricciardi -- The financial psychology of players, services, and products / Victor Ricciardi -- The financial behavior of major players -- Individual investors / Henrik Cronqvist and Danling Jiang -- Institutional investors / Alexandre Skiba and Hilla Skiba -- Corporate executives, directors, and boards / John R. Nofsinger and Pattanaporn Chatjuthamard -- Financial planners and advisors / Benjamin F. Cummings -- Financial analysts / Susan M. Young -- Portfolio managers / Erik Devos, Andrew C. Spieler, and Joseph M. Tenaglia -- Financial psychopaths / Deborah W. Gregory -- Financial and investor psychology of specific players -- The psychology of high net worth individuals / Rebecca Li-Huang -- The psychology of traders / Duccio Martelli -- A closer look at frequent trader / Michal Strahivevitz -- The psychology of women investors / Marguerita M. Cheng, and Sameer S. Somal -- The financial psychology of millennials / April Rudin and Catherine McBreen -- The psychology of financial services -- Psychological aspect of financial planning / Dave Yeske and Elissa Buie -- Financial advisory services / Jeroen Nieboer, Paul Dolan, and Ivo Vlaev -- Insurance and risk management / James M. Moten Jr. and C.W. Copeland -- Psychological factors in estate planning / John Guerin and L. Paul Hood -- Individual biases in retirement planning and wealth management / James E. Brewer Jr., and Charles Self -- The behavioral aspects of investmnet products and markets -- Traditional asset allocation securities: stocks, bonds, real estate, and cash / Christopher Milliken, Ehsan Nikbakht, and Andrew Spieler -- Behavioral aspects of mutual funds, exchange-traded funds, hedge funds, and pension funds / Nathan Mauck -- Current trends in successful international mergers and acquisitions / Nancy Hubbard -- Art and collectibles management / Peter J. May -- Market efficiency issues -- Behavioral finance market hypothesis / Alex Plastun -- Stock market anomalies / Steve Fan and Linda Yu -- The psychology of speculation in financial markets / Victor Ricciardi -- Can humans dance with machines? : institutional investors, high frequency trading, and modern markets dynamics / Irene Aldridge -- The application and future of behavioral finance -- Applications of client behavior : a practitioner's perspective / Harold Evensky -- Practical challenges of implementing behavioral finance : reflections from the field / Greg B. Davies and Peter Brooks -- The future of behavioral finance / Michael Dowling and Brian Lucey -- Discussion questions and answers -- Index Content: Financial behavior and psychology -- Financial behavior : an overview / H. Kent Baker, Greg Filbeck, and Victor Ricciardi -- The financial psychology of players, services, and products / Victor Ricciardi -- The financial behavior of major players -- Individual investors / Henrik Cronqvist and Danling Jiang -- Institutional investors / Alexandre Skiba and Hilla Skiba -- Corporate executives, directors, and boards / John R. Nofsinger and Pattanaporn Chatjuthamard -- Financial planners and advisors / Benjamin F. Cummings -- Financial analysts / Susan M. Young -- Portfolio managers / Erik Devos, Andrew C. Spieler, and Joseph M. Tenaglia -- Financial psychopaths / Deborah W. Gregory -- Financial and investor psychology of specific players -- The psychology of high net worth individuals / Rebecca Li-Huang -- The psychology of traders / Duccio Martelli -- A closer look at frequent trader / Michal Strahivevitz -- The psychology of women investors / Marguerita M. Cheng, and Sameer S. Somal -- The financial psychology of millennials / April Rudin and Catherine McBreen -- The psychology of financial services -- Psychological aspect of financial planning / Dave Yeske and Elissa Buie -- Financial advisory services / Jeroen Nieboer, Paul Dolan, and Ivo Vlaev -- Insurance and risk management / James M. Moten Jr. and C.W. Copeland -- Psychological factors in estate planning / John Guerin and L. Paul Hood -- Individual biases in retirement planning and wealth management / James E. Brewer Jr., and Charles Self -- The behavioral aspects of investmnet products and markets -- Traditional asset allocation securities: stocks, bonds, real estate, and cash / Christopher Milliken, Ehsan Nikbakht, and Andrew Spieler -- Behavioral aspects of mutual funds, exchange-traded funds, hedge funds, and pension funds / Nathan Mauck -- Current trends in successful international mergers and acquisitions / Nancy Hubbard -- Art and collectibles management / Peter J. May -- Market efficiency issues -- Behavioral finance market hypothesis / Alex Plastun -- Stock market anomalies / Steve Fan and Linda Yu -- The psychology of speculation in financial markets / Victor Ricciardi -- Can humans dance with machines? : institutional investors, high frequency trading, and modern markets dynamics / Irene Aldridge -- The application and future of behavioral finance -- Applications of client behavior : a practitioner's perspective / Harold Evensky -- Practical challenges of implementing behavioral finance : reflections from the field / Greg B. Davies and Peter Brooks -- The future of behavioral finance / Michael Dowling and Brian Lucey -- Discussion questions and answers -- Index. Cover 1 Financial Behavior 4 Copyright 5 Contents 6 List of Figures 10 List of Tables 12 Acknowledgments 14 Acronyms and Abbreviations 16 About the Editors 20 About the Contributors 22 Part One Financial Behavior and Psychology 34 1. Financial Behavior: An Overview 36 2. The Financial Psychology of Players, Services, and Products 56 Part Two The Financial Behavior of Major Players 76 3. Individual Investors 78 4. Institutional Investors 97 5. Corporate Executives, Directors, and Boards 112 6. Financial Planners and Advisors 130 7. Financial Analysts 151 8. Portfolio Managers 168 9. Financial Psychopaths 186 Part Three Financial and Investor Psychology of Specific Players 204 10. The Psychology of High Net Worth Individuals 206 11. The Psychology of Traders 225 12. A Closer Look at the Causes and Consequences of Frequent Stock Trading 242 13. The Psychology of Women Investors 257 14. The Psychology of Millennials 274 Part Four The Psychology of Financial Services 296 15. Psychological Aspects of Financial Planning 298 16. Financial Advisory Services 318 17. Insurance and Risk Management 335 18. Psychological Factors in Estate Planning 351 19. Individual Biases in Retirement Planning and Wealth Management 370 Part Five The Behavioral Aspects of Investment Products and Markets 390 20. Traditional Asset Allocation Securities: Stocks, Bonds, Real Estate, and Cash 392 21. Behavioral Aspects of Portfolio Investments 411 22. Current Trends in Successful International M&As 430 23. Art and Collectibles for Wealth Management 455 Part Six Market Efficiency Issues 470 24. Behavioral Finance Market Hypotheses 472 25. Stock Market Anomalies 493 26. The Psychology of Speculation in the Financial Markets 514 27. Can Humans Dance with Machines? Institutional Investors, High-​Frequency Trading, and Modern Markets Dynamics 532 Part Seven The Application and Future of Behavioral Finance 554 28. Applications of Client Behavior: A Practitioner’s Perspective 556 29. Practical Challenges of Implementing Behavioral Finance: Reflections from the Field 575 30. The Future of Behavioral Finance 594 Discussion Questions and Answers 612 Index 644 Financial behavior is a complex subject because how people should behave according to traditional finance often differs from how they actually behave. Although traditional and behavioral finance play important roles in understanding investor and market behavior, this book focuses on behavioral finance. Behavioral finance uses insights largely from finance, psychology, and other disciplines to explain how people act and how their behavior affects markets and other financial applications. This chapter provides an overview of behavioral finance, followed by a brief explanation of the book’s purpose, distinguishing features, and intended audience. The chapter outlines the book’s structure of: (1) financial behavior and psychology, (2) financial behavior of major players, (3) financial and investor psychology of specific players, (4) psychology of financial services, (5) behavioral aspects of investment products and markets, (6) market efficiency issues, and (7) application and future of behavioral finance.