Behavioral corporate finance
DOI:
https://doi.org/10.55312/op.vi1.4559Abstract
Corporate finance is the area of finance studying the financial and investment contracts resulting from the interaction between managers and investors of a company. A full explanation of financing and investment models requires therefore a clear understanding of managers and investors perceptions and preferences. Most of the researchers in the field of corporate finance are based on the assumption that these perceptions and preferences are fully rational. Economic agents are supposed to realize impartial projections about future events and they are based on these forecasts to make decisions that best serve their interests. This means that the mangers of a company may take for granted that capital markets are efficient, with prices that reflect the reasonable public information about fundamental values. In the same way, the investor a company can take for granted that the mangers of a company will act in their interests, responding rationally to compensation incentives, control and other mechanisms of corporate governance.Keywords:
behavior, irrationality, behavioral corporate finance, manager, investor.Downloads
References
-
Charreaux, G. Pour une gouvernance d’entreprise ‘‘comportementale’’: une reflexion exploratoire. Revue Francaise de Gestion 2005; 31; pp. 215–238.
-
Marnet, O. Behavior and Rationality in Corporate Governance. Routledge: Routledge Studies in Corporate Governance 2008; pp. 613–632.
-
DeBondt W. & Thaler R. Financial Decision-Making in Markets and Firms: A Behavioral Perspective. NBER Working Paper 1994; No. W4777; pp. 233–268.
-
Baker M., Ruback R. & Wurgler J. Behavioral Corporate Finance: A Survey. NBER Working Paper 2004; n° W10863; pp. 105–168.
-
Jost, J. T., Glaser, J., Sulloway, F. & Kruglanski, A. W. Political conservatism as motivated social cognition. Psychological Bulletin 2003; 129; pp. 339 –375.
-
Baker, M. & Wurgler, J. Behavioral corporate finance: an updated survey. NBER Working Paper 2011; No.17333; pp. 352 –385.
-
Shefrin H. Behavioral Corporate Finance. Journal of Applied Corporate Finance 2001; vol.14; n° 3; pp. 113–126.
-
Shah, P. Behavioral corporate Finance: a New Paradigm shift to understand corporate decisions. Global Research Analysis 2013; 2(1); pp. 85–86.
-
DeBondt, Werner F. M. & Thaler, Richard H. Does the stock market overreact? Journal of Finance 1985; 40; pp.793-805.
-
Daniel K. & Titman S. Market Efficiency in an Irrational World. Financial Analysts Journal 1999; vol. 55; pp. 28-40.
-
Gilovich, T., Griffin, D., & Kahneman D. Heuristics and Biases: The psychology of intuitive judgment. Cambridge; Cambridge University Press; 2002.
-
Kahneman, D. & Tversky A. Choices, Values, and Frames. Cambridge; Cambridge University Press; 2000.
-
Weinstein, Neil D. Unrealistic optimism about future life events. Journal of Personality and Social Psychology 1980; 39; pp. 806-820.
-
Larwood, L. & Whittaker W. Managerial myopia: Self-serving biases in organizational planning. Journal of Applied Psychology 1977; 62; pp. 194-198.
-
March, James G. & Shapira, Z. Managerial perspectives on risk and risk taking. Management Science 1987; 33; pp.1404-1418.
-
Ben-David, I. Optimism in managerial forecasts and plans. University of Chicago working paper 2004; pp. 204-227.
-
Langer, Ellen J. & Roth J. Heads I win tails its chance: The illusion of control as a function of the sequence of outcomes in a purely chance task. Journal of Personality and Social Psychology 1975; 32; pp. 951-955.
-
Gervais, S. and Odean, T. Learning to be overconfident. Review of Financial Studies 2001; 14; pp. 1-27.
References
Charreaux, G. Pour une gouvernance d’entreprise ‘‘comportementale’’: une reflexion exploratoire. Revue Francaise de Gestion 2005; 31; pp. 215–238.
Marnet, O. Behavior and Rationality in Corporate Governance. Routledge: Routledge Studies in Corporate Governance 2008; pp. 613–632.
DeBondt W. & Thaler R. Financial Decision-Making in Markets and Firms: A Behavioral Perspective. NBER Working Paper 1994; No. W4777; pp. 233–268.
Baker M., Ruback R. & Wurgler J. Behavioral Corporate Finance: A Survey. NBER Working Paper 2004; n° W10863; pp. 105–168.
Jost, J. T., Glaser, J., Sulloway, F. & Kruglanski, A. W. Political conservatism as motivated social cognition. Psychological Bulletin 2003; 129; pp. 339 –375.
Baker, M. & Wurgler, J. Behavioral corporate finance: an updated survey. NBER Working Paper 2011; No.17333; pp. 352 –385.
Shefrin H. Behavioral Corporate Finance. Journal of Applied Corporate Finance 2001; vol.14; n° 3; pp. 113–126.
Shah, P. Behavioral corporate Finance: a New Paradigm shift to understand corporate decisions. Global Research Analysis 2013; 2(1); pp. 85–86.
DeBondt, Werner F. M. & Thaler, Richard H. Does the stock market overreact? Journal of Finance 1985; 40; pp.793-805.
Daniel K. & Titman S. Market Efficiency in an Irrational World. Financial Analysts Journal 1999; vol. 55; pp. 28-40.
Gilovich, T., Griffin, D., & Kahneman D. Heuristics and Biases: The psychology of intuitive judgment. Cambridge; Cambridge University Press; 2002.
Kahneman, D. & Tversky A. Choices, Values, and Frames. Cambridge; Cambridge University Press; 2000.
Weinstein, Neil D. Unrealistic optimism about future life events. Journal of Personality and Social Psychology 1980; 39; pp. 806-820.
Larwood, L. & Whittaker W. Managerial myopia: Self-serving biases in organizational planning. Journal of Applied Psychology 1977; 62; pp. 194-198.
March, James G. & Shapira, Z. Managerial perspectives on risk and risk taking. Management Science 1987; 33; pp.1404-1418.
Ben-David, I. Optimism in managerial forecasts and plans. University of Chicago working paper 2004; pp. 204-227.
Langer, Ellen J. & Roth J. Heads I win tails its chance: The illusion of control as a function of the sequence of outcomes in a purely chance task. Journal of Personality and Social Psychology 1975; 32; pp. 951-955.
Gervais, S. and Odean, T. Learning to be overconfident. Review of Financial Studies 2001; 14; pp. 1-27.
Shqip
English
Italiano
