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...

Fear of private equity (PE) firms 'putting lipstick on the pig' when divesting investee companies is common in the IPO investor market. PE firms wishing to maximise their exit value showcase investee companies in the best possible light. While PE firms are thought to add considerable value to...

This study examines the influence of investment fund performance presentation format on investor decisions. We perform an experiment in which participants are shown past performance information about two funds one with superior short-term results and the other with better long-term results and...