ECONIS Select – The Psychology of Financial Crises

06/2009

The mainstream economists account of financial crises - based on rational expectations, maximization of stable utility functions, information shocks - is currently called into question by recent research in psychology and neuroscience. The latter research portrays peoples financial decisions as the outcome of emotional reactions to ambiguity and uncertainty, swings of confidence and trust due to "animal spirits," herd behaviour and other social interactions, shifts in moral responsibility due to changes in social norms, and other mental, social and anthropological forces.

What are the circumstances under which the economic or psychological approaches are likely to be dominant? How should policy makers, bankers and investors be made aware of these circumstances? What are the implications of the psychological approach, alongside the traditional economic one, for investment strategies, financial practices, and financial regulation? What are the implications for risk-management practices by business? How should our financial instruments and institutions be redesigned on the basis of these insights?

Literature selected from our database ECONIS:

• Title: Animal spirits : how human psychology drives the economy, and why it matters for global capitalism / George A. Akerlof and Robert J. Shiller
  Year: Princeton, N.J. [u.a.] : Princeton Univ. Press, 2009
  Keywords: Verhaltensökonomik / Wirtschaftspsychologie / Wirtschaftswissenschaft
  Signature: B 362606
• Title: Confidence, crashes and animal spirits / Roger E. A. Farmer
  Year: Cambridge, Mass. : National Bureau of Economic Research, 2009
  Series: NBER working paper series ; 14846
  Keywords: Wirtschaftslage / Wirtschaftspolitik / Vertrauen / Wirtschaftskrise / Keynesianismus / Marktversagen / Arbeitsmarkt / Theorie / USA / 2009
  Signature: W 1 (14846)
  Link: http://papers.nber.org/papers/w14846.pdf
• Paper: The economic psychology of stock market bubbles in China / Shujie Yao and Dan Luo
  In: The world economy . - Oxford : Wiley-Blackwell, ISSN 0378-5920, ZDB-ID 1328967. - Bd. 32.2009, 5, S. 667-691
  Keywords: Aktienmarkt / Bubbles / Wirtschaftspsychologie / Anlageverhalten / China
• Title: Psychological aspects of market crashes / Patrick Leoni
  Year: Apr. 2007
  Anbieter: Maynooth, Co. Kildare : Saint Patricks College, Dep. of Economics
  Series: Working papers / Department of Economics, NUI Maynooth ; 173
  Keywords: Finanzmarktkrise / Anlageverhalten / Wirtschaftspsychologie / Theorie
  Link: http://economics.nuim.ie/research/workingpapers/documents/N1730407.pdf
  Signature: W 884 (173)
• Title: Anticipation, ocurrence and magnitude of market crashes / by Patrick Leoni
  Year: Odense : Univ. of Southern Denmark, 2008
  Series: Discussion papers on business and economics / University of Southern Denmark, Faculty of Social Sciences ; 2008,12
  Keywords: Finanzmarktkrise / Dynamisches Gleichgewicht / Anlageverhalten / Markteffizienz / Erwartungstheorie / Theorie
  Link: http://www.sdu.dk/~/media/Files/O...papers/Disc_2008/dpbe12_2008.ashx
• Title: Stochastic behavioral asset pricing models and the stylized facts / by Thomas Lux
  Year: Kiel : Univ., Dep. of Economics, 2008
  Series: Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics ; 2008,08
  Keywords: Börsenkurs / Finanzmarkt / Stochastischer Prozess / Anlageverhalten / Agent-based Model / Soziale Beziehungen / Econophysics / Theorie
  Link: Download: 25.06.2008
• Paper: Testing intentional herding in familiar stocks : an experiment in an international context / Natividad Blasco; Sandra Ferreruela
  In: The journal of behavioral finance . - Philadelphia, Pa. : Taylor & Francis, ISSN 1542-7560, ZDB-ID 2110458X. - Bd. 9.2008, 2, S. 72-84
  Keywords: Internationaler Finanzmarkt / Herdenverhalten / Markteffizienz / Anlageverhalten / Vergleich
• Paper: The spirit of capitalism, stock market bubbles and output fluctuations / Takashi Kamihigashi
  In: International journal of economic theory . - Oxford : Blackwell, ISSN 1742-7355, ZDB-ID 22065878. - Bd. 4.2008, 1, S. 3-28
  Keywords: Aktienmarkt / Bubbles / Makroökonomischer Einfluss / Gesamtwirtschaftliche Produktion / Skalenertrag / Nutzenfunktion / Sunspot / Capital Asset Pricing Model / Theorie
• Paper: Market efficiency cum anomalies or behavioral finance? / George M. Frankfurter
  In: Homo oeconomicus . - München : Accedo Verl.-Ges., ISSN 0943-0180, ZDB-ID 6263513. - Bd. 24.2007, 1, S. 81-93
  Keywords: Anlageverhalten / Effizienzmarktthese / Capital Asset Pricing Model / Markteffizienz / Finanzmarkt / Dogmengeschichte
• Title: Rumors in financial markets : insights into behavioral finance / Mark Schindler
  Year: Chichester [u.a.] : Wiley, c 2007
  Keywords: Finanzmarkt / Anlageverhalten / Börsenmakler / Verhaltensökonomik / Theorie
  Links:
  Table of contents only
  Contributor biographical information
  Publisher description
  Signature: B 349037
• Title: Animal spirits and monetary policy / Paul DeGrauwe
  Year: München : CESifo, 2008
  Series: CESifo working paper ; 2418 : Monetary policy and international finance
  Keywords: Konjunkturtheorie / Dynamisches Gleichgewicht / Allgemeines Gleichgewicht / Sunspot / Geldpolitik / Inflation Targeting / Theorie
  Systemvoraussetzungen: Acrobat reader
  Link: http://www.cesifo-group.de/~DocCIDL/cesifo1_wp2418.pdf
• Title: Cognitive abilities and behavioral biases / Jörg Oechssler and Andreas Roider and Patrick W. Schmitz
  Year: Mannheim : Univ., Sonderforschungsbereich 504, 2008
  Series: Working paper series / Sonderforschungsbereich 504, Rationalitätskonzepte, Entscheidungsverhalten und Ökonomische Modellierung ; 08,05
  Keywords: Anlageverhalten / Verhaltensökonomik / Kognition / Entscheidung / Test / Cognitive Reflection Test
  Signature: W 1155 (08.05)
• Title: The flypaper effect in individual investor asset allocation / James J. Choi; David Laibson; Brigitte C. Madrian
  Year: Cambridge, Mass. : National Bureau of Economic Research, 2007
  Series: NBER working paper series ; 13656
  Keywords: Verhaltensökonomik / Wertpapieranlage / Anlageverhalten / Allokationseffizienz / Anpassungskosten / Risiko / Flypaper-Effekt
  Signature: W 1 (13656)
  Link: http://papers.nber.org/papers/w13656.pdf
• Paper: Overconfidence and trading volume / Markus Glaser; Martin Weber
  In: The Geneva risk and insurance review . - Basingstoke : Palgrave Macmillan, ISSN 1554-964X, ZDB-ID 21979923. - Bd. 32.2007, 1, S. 1-36
  Keywords: Anlageverhalten / |stw| Verhaltensökonomik / |stw| Wirtschaftspsychologie / |stw| Theorie
• Paper: Variable rare disasters : a tractabel theory of ten puzzles in macro-finance / by Xavier Gabaix
  In: The American economic review . - Nashville, Tenn. : American Economic Assoc., ISSN 0002-8282, ZDB-ID 203590x. - Bd. 98.2008, 2, S. 64-67
  Keywords: Finanzmarkt / Finanzmarktkrise / Schock / Anlageverhalten / Entscheidung bei Risiko / Kapitalertrag / Volatilität / Theorie
• Title: Understanding bank runs : the importance of depositor-bank relationships and networks / Raikamal Iyer; Manju Puri
  Year: Cambridge, Mass., 2008
  Series: NBER working paper series ; 14280
  Keywords: Bankenkrise / Einlagensicherung / Vertrauen / Anlageverhalten / Customer Relationship Management / USA / 2000-2002
  Signature: W 1 (14280)
  Link: http://papers.nber.org/papers/w14280.pdf
• Title: Psychology in financial markets : an introduction to behavioural finance / H. M. Prast
  Year: Amsterdam : NIBE-SVV, c 2004
  Series: Financiële & monetaire studies ; 22,2
  Keywords: Anlageverhalten / |stw| Verhaltensökonomik / |stw| Wirtschaftspsychologie
  Signature: B 333871