Wednesday, 28 February 2007

Behavioural finance reading list

Below is a list of papers I was sent by someone much smarter than me that I am trying to get around to read. I've been reading a bit more broadly about behavioural biases, it seems like much of the really ground-breaking work was done by Kahneman and Tversky. Two good generalist books (ie not economics/finance related) are this one and this one.

Anyway, here's the academic list:

• Montier, James, "Who's a Pretty Boy Then? Or Beauty Contests, Rationality and Greater Fools" . Available at SSRN:

• John R. Nofsinger, The Psychology of Investing, Prentice Hall

• Charles Roxburgh Hidden flaws in strategy Can insights from behavioral economics explain why good executives back bad strategies? McKinsey Quarterly 2003 Number 2

• Wiseman, Robert M, Gomez-Mejia, Luis, "A Behavioural Agency Model of Managerial Risk Taking," Academy of Management Review , vol 23 no. 1: 133-153, January 1998.

• Kahneman, Daniel and Tversky, Amos, "Prospect Theory: An Analysis of Decision Under Risk," Econometrica, Vol 47, Issue 2 (Mar., 1979) 263-292.

• Extending the model of "rational man" model of human behaviour: seven key principles, Environment Agency and the New Economics Foundation.

• 'Modeling the Psychology of Consumer and Firm Behavior with Behavioral Economics.' by Teck H. Ho, Noah Lim and Colin Camerer, in press. Posted 9/23/05 on Prof Colin Camerer's academic website

• Thaler, Richard H., 2000, "From homo economicus to homo sapiens," Journal of Economic Perspectives -Volume 14, Number 1, pp 133-141.

• Asness , Clifford S., "Rubble Logic: What Did We Learn from the Great Stock Market Bubble?", Financial Analysts Journal, Nov 2005, Vol. 61, No. 6: 36-54.

• Barberis , Nicholas and. Thaler, Richard H (2003), " A Survey of Behavioral Finance. " In Handbook of the Economics of Finance. George M. Constantinides, Milton Harris, and Rene' Stultz editors. Elsevier Science, North Holland, Amsterdam.

• Gilson, Ronald J. and Kraakman, Reinier, "MOME (Mechanisms Of Market Efficiency) in Hindsight," Regulation, Vol. 27, No. 4, pp. 64-72, Winter 2004

• Stout, Lynn A., "The Mechanisms of Market Inefficiency: An Introduction to the New Finance" (December 1, 2003). UCLA School of Law, Law & Econ. Research Paper No. 03-23. Available at SSRN: or DOI: 10.2139/ssrn.470161

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