|
|
|
Behavioural Finance has emerged has a new research field in finance addressing the impact of psychology on individual choice behavior when making financial decisions, and the subsequent implications for asset markets. Behavioural Finance has successfully addressed several observed anomalies, i.e., empirical facts that cannot be explained using traditional models in Finance. The prospect theory of Daniel Kahneman and Amos Tversky, one of the pillar of Behavioural Finance, has been awarded with the Nobel Prize in Economics in 2002. Behavioural Finance has also attracted much attention among practitioners. Just to mention some examples, Behavioural Finance has been implemented in order to improve the advisory process in private banking, the design of structure products, and that of pension plans. The goal of our research is to build theoretical foundation to Behavioural Finance. More specifically, we aim to the development of a theory of portfolio selection that take investors' psychology into account. |