Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 31, 2010 erstellt
Beschreibung:
Classical financial theory assumes that individuals are perfectly rational and act by usingcomplete and homogeneous information sets. For a long time, this has been used both ondescriptive and normative grounds. However, empirical research has shown thatinvestors systematically commit reasoning or preference errors hard to reconcile with therationality assumption. These errors are reflected in “behavioural anomalies” that leadretail investors to low participation in the equity market, perception errors of the risk-returnrelationship, poor portfolio diversification and excessive trading. This papersurveys and discusses the insights of behavioural finance that help us to understandobserved anomalies using the theoretical apparatus of cognitive psychology andexperimental evidence. These insights, by providing a review of the real perceptions ofphenomena and the psychological and irrational components at the basis of individualchoices, may be helpful to strengthen the efficiency of financial regulation andsupervision. In particular, financial education in a behavioural vein can be used toimprove investors' capacity to judge and to raise their understanding of the most seriousbehavioural “traps”. The contents and presentation format of disclosure on thecharacteristics of financial products also lay themselves open to be geared to theprescriptions of behavioural finance. Finally, financial advice is an indispensablesupplement for guiding investors to make decisions that best serve their interests and forstrengthening the efficiency of financial regulation; financial advisors should thereforeendeavour to help customers to contain the most common behavioural errors. Thepurpose of this work is to stimulate debate on the behavioural analysis of the abovementioned policy issues, in order to strengthen the efficiency of instruments madeavailable to investors to understand the characteristics of financial products