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A Fast and Frugal Finance: Bridging Contemporary Behavioural Finance and Ecological Rationality adds psychological reality to classical financial reasoning. It shows how financial professionals can reach better and quicker decisions using the 'fast and frugal' framework for decision-making, adding dramatically to time and outcome efficiency, while also retaining accuracy. The book provides the reader with an adaptive toolbox of heuristic tools and classification systems to aid real-world decisions. Throughout, financial applications are presented alongside real-world examples to help readers solve established problems in finance, including stock buying and selling decisions, when faced with not only risk but fundamental uncertainty. The book concludes by describing potential solutions to financial problems in the forefront of contemporary debates, and calls for taking psychological insights seriously.
In this age of Big Data and analytics, knowledge gained through experiential learning and intuition may be taking a back seat to analytics. However, the use of intuition should not be underestimated and should play an important role in the decision process. How Well Do Executives Trust Their Intuition covers the Fulbright research study conducted by this international team of editors. The main question of their investigation is: How well do executives trust their intuition? In other words, do they typically prefer intuition over analysis and analytics. And equally importantly, what types of intuition may be most favorable looking at different variables? The research utilizes survey and biome...
The first and only encyclopedia to focus on the economic and financial behaviors of consumers, investors, and organizations, including an exploration of how people make good—and bad—economic decisions. Traditional economic theories speculate how and when people should spend money. But consumers don't always behave as expected and often adopt strategies that might appear unorthodox yet are, at times, more effective than the rule prescribed by conventional wisdom. This groundbreaking text examines the ways in which people make financial decisions, whether it is because they are smart but atypical in their choices ... or just irrational decision makers. A leading authority on behavioral eco...
Rules for building formal models that use fast-and-frugal heuristics, extending the psychological study of classification to the real world of uncertainty. This book focuses on classification--allocating objects into categories--"in the wild," in real-world situations and far from the certainty of the lab. In the wild, unlike in typical psychological experiments, the future is not knowable and uncertainty cannot be meaningfully reduced to probability. Connecting the science of heuristics with machine learning, the book shows how to create formal models using classification rules that are simple, fast, and transparent and that can be as accurate as mathematically sophisticated algorithms developed for machine learning.
Herbert Simon’s renowned theory of bounded rationality is principally interested in cognitive constraints and environmental factors and influences which prevent people from thinking or behaving according to formal rationality. Simon’s theory has been expanded in numerous directions and taken up by various disciplines with an interest in how humans think and behave. This includes philosophy, psychology, neurocognitive sciences, economics, political science, sociology, management, and organization studies. The Routledge Handbook of Bounded Rationality draws together an international team of leading experts to survey the recent literature and the latest developments in these related fields....
Despite the significance and prevalence of errors in organizations, there has been no attempt within the field of Industrial and Organizational Psychology to create a single source summarizing what we know regarding errors in organizations and providing a focused effort toward identifying future directions of research. This volume answers that need and provides contributions by researchers who have conducted a considerable amount of research on errors occurring in the work context. Students, academics and practitioners in a wide range of disciplines, i.e., industrial organizational psychology, medicine, aviation, human factors and systems engineering, will find this book of interest.
We all want more information in order to make better decisions and calculate risk, but oftentimes that information is scarce. This new strategy, based on extensive cognitive and economic research, shows how to make financial decisions through a 'fast and frugal' method.