This paper selectively reviews the literature on behavioural finance, focusing on the aggregate market implications of the behavioural biases that this literature has identified. Advocates of behavioural economics and finance argue that economic agents behave in a way which departs significantly...

Ever since the Creation of the stock exchange, scientists have tried to endow them with a theoretical representation. Mathematicians endeavoured to demonstrate that the Gaussian character of financial markets should by necessity neutralise any speculative temptation. Astrophysicists went further...

Financial market participants exercise judgment in decision making and psychological studies have shown that individuals are overconfident about their ability to evaluate financial securities. Range estimation calibration studies indicate that individuals tend to estimate narrow intervals in...

Purpose – The purpose of this paper is to solve the optimal managerial compensation problem when shareholders are either naïvely optimistic or rational. Design/methodology/approach –The paper uses applied game theory to derive the optimal CEO compensation package with over optimistic...

Purpose – The purpose of this paper is to present a review as well as a synthesis of the extant literature in the field of Neurofinance. The paper has been divided into eight parts. The first and second parts introduce the paper and dwell upon the brain functions in financial decisions. Part...

Investments in renewable energy (RE) technologies are regarded with increasing interest as an effective means to stimulate growth and accelerate the recovery from the recent financial crisis. Yet, despite their appeal, and the numerous policies implemented to promote these technologies, the...

We estimate in this paper a non probabilistic Markovien model of stocks prices with an evolutionary selection of heterogeneous strategies. We chose to proceed by estimation relating on 27 companies from the CAC 40 and the composite index corresponding to these 27 companies to avoid the risk of...

Using investment policy data of 857 Dutch pension funds during 1999–2006, we develop three indicators of investor sophistication. The indicators show that pension funds’ strategic portfolio choices are often based on coarse and less sophisticated approaches. First, most pension funds round...

The main aim of this work is to incorporate selected findings from behavioural finance into a Heterogeneous Agent Model using the Brock and Hommes (1998) [34] framework. Behavioural patterns are injected into an asset pricing framework through the so-called ‘Break Point Date’, which allows...