Financial Economics A Concise Introduction to Classical and Behavior
Financial economics is a fascinating topic where ideas from economics, mathematics and, most recently, psychology are combined to understand financial markets. This book gives a concise introduction into this field and includes for the first time recent r
- PDF / 4,611,459 Bytes
- 375 Pages / 439.37 x 666.142 pts Page_size
- 66 Downloads / 273 Views
•
Thorsten Hens
•
Marc Oliver Rieger
Financial Economics A Concise Introduction to Classical and Behavioral Finance
123
Professor Dr. Thorsten Hens ISB, University of Zurich Plattenstrasse 32 8032 Zurich Switzerland [email protected]
Prof. Dr. Marc Oliver Rieger Fachbereich IV University of Trier Universitätsring 15 54286 Trier Germany [email protected]
ISBN 978-3-540-36146-6 e-ISBN 978-3-540-36148-0 DOI 10.1007/978-3-540-36148-0 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2010930284 c Springer-Verlag Berlin Heidelberg 2010 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMX Design, GmbH Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
Preface
Until recently, most people were not paying too much attention to financial markets. This certainly changed with the onset of the financial crisis. For a long time we took it for granted that we can borrow money from a bank or get safe interest payments on deposits. All these fundamental beliefs were shaken in the wake of the financial crisis. When the man on the street has lost his faith in systems which he believed to function as steadily as the rotation of the earth, how much more have the beliefs of financial economists been shattered? But the good news is: in recent years, the theory of financial economics has incorporated many aspects that now help to understand many of the bizarre market phenomena that we could observe during the financial crisis. In the early days of financial economics, the fundamental assumption was that markets are always efficient and market participants perfectly rational. These assumptions allowed to build an impressive theoretical model that was indeed useful to understand quite a few characteristics of financial markets. Nevertheless, a major financial crisis was not necessary to realize that the assumptions of perfectly efficient markets with perfectly rational investors did not hold – often not even “on average”. The observation of systematic deviations gave birth to a new theory, or rather a set of new theories, behavioral finance theories. While classical finance remains the cornerstone of financial theory – and be it only as a benchmark that helps u
Data Loading...
