Market Insanity: A Brief Guide to Diagnosing the Madness in the Stock Market

Market Insanity is an engaging and accessible primer which applies modern behavioural finance in the equity markets. It helps readers understand how apparently logical investment decisions can be betrayed by what Taillard calls the insanity, all those behavioral quirks which cause us to achieve less than optimal utility. The book describes how limited information, habit, the rules of the game, asymmetric information, and ego blend together in potentially toxic ways in market environments, creating bubbles, stock runs, and more prosaically, even 'normal' equity prices. For Taillard, everything that occurs in the financial sector is a direct result of our decisions, so we must delve deeply into our economic psychology to understand our anomalous psychological profile. This book explores what kind of behaviors would be expected under the rational neoclassical paradigm. It counterpoints that against the kinds of behaviour we see instead. It explores the causes of these deviations from rationality, and whether the deviation from rationality actually has a basis in optimizing utility in some other way. It discusses the implications of these behaviors in depth. In so doing, it helps the reader to not only predict the madness within equity markets, but helps develop solutions that address and mitigate them. Provides detailed and accurate descriptions of the most relevant behavioural anomalies for financeEntertainingly written by a veteran consultant with 15+ years experience helping companies explain anomalous finance behavior in non-economic languageShows how educated finance professionals can use behavioral insights to help build finance solutionsAddresses the implications for equity markets in deviations from rationality paradigmsDraws on a vast range of literature in explaining anomalous behavior, including economic psychology, economic psychology, evolutionary psychology, anthropology and animal behaviorReplete with memorable examples relevant to behavioral finance drawn from the literature INDICE: 1. Introduction 2. The Rational Fallacy 3. Bizarre Biases 4. Bad Behavior 5. Problematic Perception 6. Feeling Foolish 7. Mindful Measures 8. Conclusion

• ISBN: 978-0-12-813115-2
• Editorial: Academic Press
• Encuadernacion: Rústica
• Páginas: 432
• Fecha Publicación: 01/08/2018
• Nº Volúmenes: 1
• Idioma: Inglés