Demystifying Behavioral Finance: Foundational Theories to Contemporary Applications and Future Directions - Hardcover

Ooi, Kok Loang

Hardcover

ISBN 10: 9819626897 ISBN 13: 9789819626892

Publisher: Springer, 2025

Synopsis

This book provides a thorough examination of behavioural finance, charting its development from foundational theories to contemporary applications and future directions. It delves into the psychological underpinnings of investor behaviour, elucidating how cognitive biases and emotional responses shape financial markets. Beginning with the seminal theories such as Prospect Theory by Kahneman and Tversky, the book explores the contributions of pioneering researchers who laid the groundwork for this field. It then transitions to modern behavioural finance theories, presenting significant research findings and their implications for today's financial landscape. Through detailed case studies, the book illustrates the practical application of behavioural finance principles in investment strategies, corporate finance, and personal finance, offering readers valuable real-world insights. Case studies include analyses of market anomalies like the Tulip Mania and the Dot-com Bubble, as well as modern market disruptions such as the 2008 Financial Crisis, the market reactions during the COVID-19 pandemic, and recent events like the GameStop short squeeze and the cryptocurrency market fluctuations. These examples highlight the influence of behavioural factors on market stability and investor behaviour.

Additionally, the book investigates emerging trends and technologies, such as AI and machine learning, and their impact on behavioural finance. It also offers a global perspective, comparing behavioural finance across different cultural and market contexts. The concluding section discusses the policy implications of behavioural finance insights and forecasts the field's future trajectory. Aimed at academics, finance professionals, and advanced students, this book is an indispensable resource for those seeking to understand the intricate relationship between psychology and finance, and a significant contribution to the literature on financial behaviour.

About this title

About the Author

Kok Loang Ooi is a renowned expert in behavioural finance and capital markets, currently serving at the University of Malaya (UM) in the Department of Finance, Faculty of Business and Economics. He holds a Master's degree in Finance and a PhD in Behavioural Finance from Universiti Sains Malaysia (USM), and a Master's degree in Law from the International Islamic University Malaysia (IIUM). Additionally, he is a US Certified Internal Auditor (CIA) with professional experience as an auditor at KPMG. Dr. Ooi has published multiple articles in high-impact SSCI and top-tier Scopus journals and serves as a reviewer in the field of behavioural finance. With an H-index of 13 within just three years, his academic contributions are complemented by his tenure as Deputy Dean at a prestigious private university and his active involvement in research and professional organizations, making him a leading figure in the study and application of behavioural finance.

From the Back Cover

This book provides a thorough examination of behavioural finance, charting its development from foundational theories to contemporary applications and future directions. It delves into the psychological underpinnings of investor behaviour, elucidating how cognitive biases and emotional responses shape financial markets. Beginning with the seminal theories such as Prospect Theory by Kahneman and Tversky, the book explores the contributions of pioneering researchers who laid the groundwork for this field. It then transitions to modern behavioural finance theories, presenting significant research findings and their implications for today's financial landscape. Through detailed case studies, the book illustrates the practical application of behavioural finance principles in investment strategies, corporate finance, and personal finance, offering readers valuable real-world insights. Case studies include analyses of market anomalies like the Tulip Mania and the Dot-com Bubble, as well as modern market disruptions such as the 2008 Financial Crisis, the market reactions during the COVID-19 pandemic, and recent events like the GameStop short squeeze and the cryptocurrency market fluctuations. These examples highlight the influence of behavioural factors on market stability and investor behaviour.

Additionally, the book investigates emerging trends and technologies, such as AI and machine learning, and their impact on behavioural finance. It also offers a global perspective, comparing behavioural finance across different cultural and market contexts. The concluding section discusses the policy implications of behavioural finance insights and forecasts the field's future trajectory. Aimed at academics, finance professionals, and advanced students, this book is an indispensable resource for those seeking to understand the intricate relationship between psychology and finance, and a significant contribution to the literature on financial behaviour.

Edition details

• Publisher: Springer
• Publication date: 2025
• Language: English
• ISBN 10: 9819626897
• ISBN 13: 9789819626892
• Binding: Hardcover
• Number of pages: 170