To date, scholars working in the area of behavioral finance have mostly focused on asset pricing and portfolio theory, but less so in corporate finance. In this paper, I propose a conceptual framework for applying behavioral ideas to the main topics which comprise corporate finance, and call the...

Managers and corporate directors need to recognize two key behavioral impediments that obstruct the process of value maximization, one internal to the firm and the other external. I call the first obstruction behavioral costs. Behavioral costs, like agency costs, tend to prevent value creation....

The paper makes four contributions. First, it provides new data and findings about credit card usage segmentation in respect to spending and borrowing behavior. Second, it sets the new findings against the backdrop of the newly emerging literature on financial literacy. There is great...

Although many economists, most notably Strotz, have discussed dynamic inconsistency and precommitment, none have dealt directly with the essence of the problem: self-control. This paper attempts to fill that gap by modeling man as an organization. The Strotz model is recast to include the...

This paper examines corporate risk taking behavior in the wake of unsuccessful merger activities. We find that relative to other firms, firms that made bad acquisitions take both more systematic risk and more idiosyncratic risk. Moreover, higher risk is associated with greater value destruction...

The main goal of this Element is to provide a psychological explanation for why actual global climate policy is so much at odds with the prescriptions of most neoclassical economists. To be sure, the behavioral approach does focus on why neoclassical models are often psychologically unrealistic....