Talk:Behavioral strategy

Latest comment: 6 months ago by JDinJD in topic Updates to the Behavioral Strategy Page


My students are working on creating content in Arabic Wikipedia. They occasionally translate some into English. The follow is some content that I believe needs to be added to the article. Once all material is gathered here, I will move it to the article. --Tarawneh (talk) 18:37, 25 June 2021 (UTC)Reply

Part 1:

Behavioural finance integrates psychological research that describes how people behave in real life and applies it to finance. Two significant study lines have resulted as a result of this:[1]

The first is about how investor behavior may differ from the textbook definition of an efficient rational investor. The other is how investors who aren't completely rational can cause market prices to vary from their underlying values.

The first strand of research examines how investors act in order to determine how investing strategies should meet their desires. The second strand of research examines how investor behavior may influence market functioning; It's used to determine whether active investment managers will find it simpler to outperform (short answer is "no").

In 2002, a professor of psychology, Daniel Kahneman, was awarded the Nobel Prize in Economics[2] (who won it jointly with Vernon Smith) in recognition of the contribution that behavioral analysis is now making in financial economics. This research arose from a series of experiments that yielded significant findings about the biases that influence how people make decisions and create preferences.[3]

Giving investing advice requires a thorough grasp of investor preferences, and understanding investor biases is crucial for predicting how investors will react to specific events or developments. If biases are flaws that could harm an investor's interests, investing advisers should avoid catering to them. This, for example, implies a need for investor education. Investors and their advisers, should be aware of these biases because they will influence how they react to a variety of predicted market movements.[4]

Wiki Education assignment: Project Team Management

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  This article was the subject of a Wiki Education Foundation-supported course assignment, between 29 January 2024 and 22 April 2024. Further details are available on the course page. Student editor(s): Wifelife, JDinJD (article contribs).

— Assignment last updated by Wifelife (talk) 18:35, 14 April 2024 (UTC)Reply

Updates to the Behavioral Strategy Page

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I have made some edits to the "Study Lines" portion of the page and updated the language. They are minor edits and adding citations. JDinJD (talk) 01:49, 22 April 2024 (UTC)Reply

  1. ^ Stanyer, Peter (2006). Guide to investment strategy : how to understand markets, risk, rewards and behaviour. London: Economist in association with Profile Books. ISBN 978-1-84765-023-8. OCLC 124051284.
  2. ^ "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2002". NobelPrize.org. Retrieved 2021-06-25.
  3. ^ "Daniel Kahneman: Psychology for Behavioral Finance". CFA Institute Enterprising Investor. 2012-05-14. Retrieved 2021-06-25.
  4. ^ "Why Investors are Irrational, According to Behavioral Finance". Toptal Finance Blog. Retrieved 2021-06-25.