Mathematical Finance Seminar
April 6, 2006 5:30 PM to 7:00 PM
Stephen Ross, MIT
A neoclassical look at behavioral finance
The profusion of alleged empirical anomalies to neoclassical finance
has given rise to the fashionable new 'Behavioral Finance'. Behavioral
finance attempts to draw on psychological insights to find explanations for
empirical results which, on their face, seem to contradict the neoclassical
views of financial markets. This talk critically examines two canonical
sets of empirical results which are mainstays of behavioral finance and
argues that the embrace of alternative methodologies is premature at best.