The following paper is a theoretical introduction of the misinformation effect to behavioural finance. The misinformation effect causes a memory report regarding an event or particular knowledge to become contaminated with misleading information from another source. The paper aims to describe...

Artificial stock markets are built with diffuse priors in mind regarding trading strategies and price formation mechanisms. Diffuse priors are a natural consequence of the unknown relation between the various elements that drive market dynamics and the large variety of market organizations,...

In this study we investigate the return-implied volatility relationship in the French market by considering the behavioural biases of representativeness, extrapolation and affect. We find a strong evidence of negative and asymmetric return-implied volatility relationship at daily frequency,...

This study investigates the perceptions of estate agents regarding the decision making behaviour of property investors in Kenya using behavioural finance theories. The study uses a survey questionnaire to collect data targeting all the 155 real estate agents within the Nairobi district who are...

The massive accumulation of foreign reserves by China has challenged the conventional thinking about prudent reserve management. This paper develops a behavioural model of optimal decision making under uncertainty to explain the observed Chinese reserve policy. Departing from the conventional...

Behavioural finance and behavioural corporate finance analyses the effects of psychological biases, heuristics, and emotions on investors' and managers' decision-making and performance. Taffler and Tuckett (2005) have introduced a major paradigm shift by introducing a new field of research,...

To assess if risk attitudes play a role in individual investors' reactions to adverse events in financial markets, members of a university community (N = 102) were administered a risk tolerance instrument. Additional survey items asked about financial, emotional and behavioural effects of the...

This study attempts to group investors into different segments based on their type (professional or individual investors) and, then, to examine whether there are differences in the various psychological biases and personality traits, as well as in their investment behaviour. The behavioural...

It is the position of this paper that recent financial crises have been amplified, if not created, by the sin of professional financial untrustworthiness. Trust is the bedrock of financial behaviour and without trust, financial markets fail as efficient resource allocators. Sin is identified as...

This paper reports the results of an experiment designed to provide insight into how people use financial information. Investors are faced with an ominous task when trying to aggregate information about available investment opportunities. In the experiment, participants received a set of...