Behavioral Finance

## Key Concepts

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Bias - A predisposition towards error.

* w:Excessive Optimism \- Overestimating the frequency of experiencing favorable outcomes and underestimating the frequency of experiencing unfavorable outcomes.
* w:Winner's curse \- Winners of auctions tend to overpay.
* Overconfidence
* Confirmation Bias
* Illusion of Control
* Heuristics
* Representativeness
* Availability
* Anchoring
* Loss Aversion
* Aversion to Sure Loss
* Framing

Prospect Theory - [[[Wikipedia:Prospect theory|Wiki Link]]] - [Original Paper]

## Key Researchers

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Daniel Kahneman
Amos Tversky

## Suggested Textbooks

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Behavioral Corporate Finance, Hersh Shefrin, 2007, ISBN 978-0-07-284865-6
Behavioural Finance, James Montier, 2002, ISBN 978-0-470-84487-8