The Financial Consequences of Behavioural Biases

1. Front Matter

   Pages i-xv

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2. The Rise and Fall of Neoclassical Finance

   • Imad A. Moosa, Vikash Ramiah

   Pages 1-25

3. The Rise and Rise of Behavioural Finance

   • Imad A. Moosa, Vikash Ramiah

   Pages 27-44

4. Overconfidence and Self-Serving Bias

   • Imad A. Moosa, Vikash Ramiah

   Pages 45-69

5. Loss Aversion Bias, the Disposition Effect and Representativeness Bias

   • Imad A. Moosa, Vikash Ramiah

   Pages 71-92

6. Other Biases in the Behavioural Finance Literature

   • Imad A. Moosa, Vikash Ramiah

   Pages 93-124

7. Recent Developments

   • Imad A. Moosa, Vikash Ramiah

   Pages 125-150

8. Epilogue

   • Imad A. Moosa, Vikash Ramiah

   Pages 151-162

9. Back Matter

   Pages 163-174

   PDF

This book provides a concise analysis of behavioural biases and their implications for financial decision making. The book is written in the normative tradition, arguing strongly for the superiority of behavioural finance with respect to explaining observed phenomena in financial markets. It offers some unique features, including a discussion of the issue of conspiracy theory and how behavioural biases lead to belief in conspiracy theories. Lingering belief in the principles of neoclassical finance is attributed in part to the doctrine of publish or perish, which dominates contemporary academia. The offshoots of behavioural finance are discussed in detail, including ecological finance, environmental finance, social finance, experimental finance, neurofinance, and emotional finance. A comprehensive discussion of narcissism is presented where it is demonstrated that narcissistic behaviour is prevalent in the finance industry and that it led to the eruption of the global financial crisis.

• Investor bias
• Stock market
• Corporate finance
• Financial planning
• Trading strategies
• Overconfidence
• Prospect theory
• Loss aversion bias
• Disposition effect
• Rationality

• School of Economics, Finance and Marketing, RMIT, Melbourne, Australia

  Imad A. Moosa

• School of Commerce, UNISA, Adelaide, Australia

  Vikash Ramiah

Imad A. Moosa is Professor of Finance at RMIT University, Australia. Before coming to academia, he worked in investment banking for a period of ten years. He has published extensively in both economics and finance.


Vikash Ramiah is Associate Professor of Finance at the University of South Australia. He has published extensively in behavioural and environmental finance, and he is a research fellow for the Institute of Global Business and Society, TH Köln, and Tianjin Academy of Environmental Sciences.

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