Description
Book SynopsisFinancial markets are complex. Regulators strive to predict ways in which they can malfunction and create rules to prevent this from happening, yet behavioural impacts are often overlooked. This book explores how behavioural finance can go hand-in-hand with traditional methods to help banks and regulators create better policies. It also demonstrates how the behavioural finance revolution has opened the way to a more integrated approach to the analysis of economic phenomena.
This book adopts a forward-looking agenda that takes account of existing practices based on behavioural science. It focuses on how to make financial markets an arena for fair play as a central criterion for securing and enhancing societal well being. It examines how bounded rationality, heuristic decision making, aversion to losses, endowment effects and social preferences may impact financial decisions, thus exposing the flaws in traditional forecasting methods that rely on an over-simplified representation of the individual.
With contributions from both academics and practitioners, this book will be fundamental reading for researchers in the finance and behavioural economics. Regulators who wish to utilise behavioural policymaking will also find this a beneficial read.
Contributors include: B. Alemanni, C. Attia, M. Bianco, G. Bracchi, E. Cervellati, C. Cruciani, G. De Felice, M. Egidi, U. Filotto, F. Franceschi, G. Gardenal, G. Gigerenzer, C. Giorgiantonio, D. Hilton, N. Linciano, A. Lojschova, D. Masciandaro, B. Mojon, P. Mottura, S. Mousavi, A. Penalver, L. Portelli, U. Rigoni, S. Rossi, Z. Rotondi, G. Sillari, A. Varaldo, R. Viale, G. Zevi
Trade Review'10 years on from the global financial crisis, large gaps remain in our understanding of how to design effective financial policies and regulations, reflecting the fact that many policymakers have a limited understanding of what drives financial choices and decisions in the real world. In filling this gap, The Behavioural Finance Revolution
collects together pathbreaking, insightful contributions from the perspective of real human behaviour. Key lessons from this impressively wide-ranging volume have the potential to transform financial regulation and policymaking for decades to come.' --Michelle Baddeley, University of South Australia
'The collective contributions in this important volume carve out a new path for how boundedly rational policymakers can structure sensible regulations for a world dominated by boundedly rational agents.'
--Hersh Shefrin, Santa Clara University, US
Table of ContentsContents: Salvatore Rossi Foreword Introduction Barbara Alemanni, Umberto Filotto, Shabnam Mousavi, Riccardo Viale Part I The Many Faces Of Finance In The Academia 1. Understanding Financial Behaviour For Better Policy Making: An Introduction Riccardo Viale 2. Behavioral Policymaking With Bounded Rationality Shabnam Mousavi 3. A Taxonomy Of Behavioural Policies Barbara Alemanni 4. Do Regulators Know Better? Umberto Filotto 5. Behavioral Finance And Non-Conventional Monetary Policies Benoit Mojon, Adrian Penalver And Adriana Lojschova 6. The Psychology Of Financial Choices: From Classical And Behavioral Finance To Neurofinance Massimo Egidi And Giacomo Sillari 7. Behavioral Re-Evolution: How Behavioral Economics Has Evolved And Is Evolving Enrico Maria Cervellati 8. Evolutionary Regulation And Financial Behavior Paolo Mottura 9. A View On Recent Advances In Behavioural Macroeconomics And Their Lessons For The Policymaker Giordano Zevi Part II Finance From The View Point Of Psychology, Banks, Regulators, And The Industry 10. The Heuristics Revolution: Rethinking The Role Of Uncertainty In Finance Gerd Gigerenzer 11. The Psychology Of Financial Incompetence: Past, Present And Future Denis Hilton And Caroline Attia 12. Behavioral Finance: From Financial Consumer Protection To Financial Education Magda Bianco And Francesco Franceschi 13. Behavioral Impact Of Policies For The Start-Up And Venture Capital Ecosystem Giampio Bracchi 14. Investors’ Inconsistencies And The Need For Better Financial Literacy Gregorio De Felice 15. How Behavioral Finance Can Reshape Financial Consumer Protection: Consob’s First Steps In The European Framework Nadia Linciano 16. When Central Bankers Become Humans: Behavioural Economics And Monetary Policy Decisions Donato Masciandaro 17. Trust The Change? Trust And The Impact Of Policy Making: The Case Of The Introduction Of The Mifid 2 Directive In The Financial Advisory Industry Ugo Rigoni, Caterina Cruciani And Gloria Gardenal 18. CMU And Role Of Institutional Investors: Investment Behavior And Governance Of Pension Funds Zeno Rotondi And Cristina Giorgiantonio 19. The Italian Household Wealth And Their Financial Attitude: The New Environment And A New Approach Alessandro Varaldo And Lorenzo Portelli Index
