The fall of 2018 saw the publication of the “Handbook of Behavioral Economics,” a landmark volume that summarizes three decades of intensive effort to improve our understanding of the economy through psychologically-realistic frameworks. The volume contains two chapters by SOM finance faculty.
Professor Nicholas Barberis contributed a chapter on asset prices, “Psychology-based Models of Asset Prices and Trading Volume,” and Professor James Choi, along with co-authors, contributed a chapter on household finance, “Behavioral Household Finance”.
Both the overall volume, and these chapters in particular, have attracted a lot of attention and will hopefully set the stage for the next two decades of progress in the field.
The International Center for Finance is a leading center for research in behavioral science – specifically, research in the fields of behavioral decision-making, behavioral economics, and behavioral finance. Behavioral decision-making studies the basic psychology of decision-making, while behavioral economics and behavioral finance study the role of irrational thinking in economic and financial decision-making, respectively. Yale’s research efforts in these fields have been helped immeasurably by the generous support of Andrew Redleaf of Whitebox Advisors.