From Efficient Market Theory to Behavioral Finance

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IrvineRenter_IHB

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<a href="http://tinyurl.com/2aw99t">From Efficient Market Theory to Behavioral Finance</a>





By


Robert J. Shiller





October 2002





Abstract. The efficient markets theory reached the height of its dominance in academic circles around the 1970s. Faith in this theory was eroded by a succession of discoveries of anomalies, many in the 1980s, and of evidence of excess volatility of returns. Finance literature in this decade and after suggests a more nuanced view of the value of the efficient markets theory, and, starting in the 1990s, a blossoming of research on behavioral finance. Some important developments in the 1990s and recently include feedback theories, models of the interaction of smart money with ordinary investors, and evidence on obstacles to smart money.





The PDF link above is 44 pages.
 
IR,





That link isn't working.





BTW I'm through the first few chapters of Irrational Exuberance and Shiller is discussing behavior finance briefly, which he attributes to the run up of the millenium market to a large degree, so this sounds like a good supplementary read.
 
I think the forum software has a bug with the length of URLs. I thought I had fixed it but it may have 'broke' again after an upgrade.
 
Cool. I plan to upload all of my research into this library section. I will do them one at a time as each old one loses interest and falls off the forum front page.
 
<p>IR,





Robert Shiller was interviewed by Patt Morrison from KPCC 89.3 FM, NPR affiliate in Pasadena, on 01/31/08.


He talked about behavioral finance, metro LA real estate, national savings rate and the January 08 Fed cuts.





<a href="http://www.publicradio.org/tools/media/player/kpcc/news/shows/pattmorrison/2008/01/20080130_pattmorrison1?start=00:26:38&end=00:52:30"><strong>The New Year Hangover Will Be a Long One: Recession in '08</strong></a> <em>(RealPlayer media player needed to hear the audio archive)


</em>


This is the <a href="http://www.scpr.org/programs/pattmorrison/listings/2008/01/pattmorrison_20080128.shtml">link</a> to the web page on KPCC.</p>

<p>On the same page there's an interview with the LA Times RE blogger of the LA Land blog about: <strong>When Borrowers Walk Away.</strong>


</p>
 
I thought I might add some of the papers Shiller cites.





One is with <a href="http://delong.typepad.com/sdj/">Prof. Brad DeLong</a> on <a href="http://www.j-bradford-delong.net/pdf_files/Noise_Traders_Main.pdf">Noise Trader Risk in Financial Markets</a>.


<a href="http://www.irvinehousingblog.com/wp-content/uploads/2008/02/prospect-k-and-t.pdf">


Prospect Theory: An Analysis of Decision Under Risk</a>, by Kahneman and Tversky.





<a href="http://www.irvinehousingblog.com/wp-content/uploads/2008/02/econometrica-565.pdf"> Bubbles, Crashes, and Endogenous expectations</a>. by Vernon L. Smith; Gerry L. Suchanek; Arlington W. Williams





I have more, and I will upload some more later to add to this thread.
 
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