Human Behavior and the Efficiency of the Financial System
Recent literature in empirical ﬁnance is surveyed in its relation to underlying behavioral principles, principles which come primarily from psychology, sociology and anthropology. The behavioral principles discussed are: prospect theory, regret and cognitive dissonance, anchoring, mental compartments, overconﬁdence, over- and underreaction, representativeness heuristic, the disjunction eﬀect, gambling behavior and speculation, perceived irrelevance of history, magical thinking, quasi-magical thinking, attention anomalies, the availability heuristic, culture and social contagion, and global culture.
Shiller, Robert J., "Human Behavior and the Efficiency of the Financial System" (1998). Cowles Foundation Discussion Papers. 1420.