This chapter focuses on the attitude of investors toward financial gains and losses and their decisions on wealth allocation, and how these changes are subject to behavioral factors. The focal point is the integration of behavioral elements into the classic portfolio optimization. Individual...

Asset allocation and portfolio diversification decisions have important welfare and policy implications. This chapter reviews studies that examine three key aspects of financial investing: participation in stock markets, portfolio diversification, and trading behavior. Standard finance theory...

Health literacy is the ability to obtain, process, and understand basic health information needed to make appropriate health decisions and follow instructions for treatment. Financial literacy is its equivalent in the financial domain, facilitating decisions on investments, retirement, health...

The need for economic stability has received considerable attention during the past few years as a result of the severity of the global recession. Financial pathology arises from personal, cultural, and transpersonal influences that comprise belief systems. In turn, these belief systems inform...

Religion has a major impact on people's daily life and is closely connected with their economic condition. The purpose of this chapter is to discuss the connection between religion and economic factors and to show how religion affects investment and financing decisions. It focuses on this...

This chapter provides a synthesis of the research literature on the relationship between money and happiness. Money refers to income and income-related factors. Happiness is typically measured by life satisfaction, but also by daily happiness and living a meaningful life. Based on research...

Examining the demographic and socioeconomic factors in investor behavior is important to understanding how investors choose their portfolios. The extant literature suggests that men invest more aggressively than women and white investors invest more aggressively than African American investors....

In contrast to the assumption of standard economic theories, human beings cannot always make rational investment and trading decisions. Thus, psychological explanations are needed to shed light on the complexity of actual decision-making processes. The purpose of this chapter is to provide an...

Standard or traditional finance research is based on the rational choice model that assumes market participants are fully rational, unbiased, emotionless, self-interested maximizers of expected utility. Recent research in behavioral finance recognizes that real-world investors and managers are...

This chapter attempts to answer the question, “What motivates people and can they be helped to achieve life satisfaction?” It transitions from classical economic theory to behavioral economics, which includes the behavioral life cycle hypothesis, and on to humanistic thoughts. Each theory...