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2017 | OriginalPaper | Buchkapitel

2. Different Views on Economic Rationality: Affect and Emotions

verfasst von : Caterina Cruciani

Erschienen in: Investor Decision-Making and the Role of the Financial Advisor

Verlag: Springer International Publishing

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Abstract

This chapter suggests that the heuristic behaviour that may lead to biases in financial decision-making is not necessarily due to irrationality, but has sound evolutionary roots developed in a time where investments and yields were not a concern, but survival was.

This chapter also looks at emotions and personality traits as important elements to understand the investor mind. Emotions are not unstable “visceral factors”, but produce predictable consequences that are key elements in the advisor–client relationship.

Cruciani reviews the concept of ecological rationality, through which different tools become more useful according to the specific features of the environment, and shows how fast and frugal trees are able to describe financial decision-making with the same, if not higher, accuracy than more cognitively complex methods.

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Vorheriges Kapitel Understanding Investor Behaviour

Nächstes Kapitel Financial Advisory: Basic Roles and Functions

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Titel: Different Views on Economic Rationality: Affect and Emotions
verfasst von: Caterina Cruciani
Verlag: Springer International Publishing
Buch: Investor Decision-Making and the Role of the Financial Advisor
Print ISBN: 978-3-319-68233-4

Electronic ISBN: 978-3-319-68234-1

Copyright-Jahr: 2017
DOI: https://doi.org/10.1007/978-3-319-68234-1_2