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2017 | OriginalPaper | Chapter

The Role of Group Psychology in Behavioural Finance: A Research Starting Point for Banking, Economic, and Financial Historians

Author : Victor Ricciardi

Published in: Decision Taking, Confidence and Risk Management in Banks from Early Modernity to the 20th Century

Publisher: Springer International Publishing

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Abstract

This paper discusses the significance of group psychology within the field of behavioural finance in order to provide a starting point for researchers in banking, economic, and financial history. Some of the major themes of behavioural finance are presented, including overconfidence, representativeness, anchoring, worry, and herd behaviour. The other major portion of this piece examines group behaviour within the investment decision-making process, drawing on the social sciences (largely social psychology) to consider the topics of group polarisation and groupthink. The author provides an overview of each topic to encourage researchers to investigate these important issues as potential causes of historical events within banking, economics, and finance. Of course there are limitations to applying behavioural finance theories and themes to historical research. Historians should investigate these potentially new ideas with a degree of caution.

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previous chapter Risk Management, Credit and the Working of Merchants’ Networks in Early Modern Banking
next chapter Behavioural Finance as a Methodological Approach for Historians? A Field Report Concerning the Construction of the Canal of Corinth in Nineteenth-Century Greece
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Metadata
Title
The Role of Group Psychology in Behavioural Finance: A Research Starting Point for Banking, Economic, and Financial Historians
Author
Victor Ricciardi
Copyright Year
2017
Book
Decision Taking, Confidence and Risk Management in Banks from Early Modernity to the 20th Century

Print ISBN: 978-3-319-42075-2

Electronic ISBN: 978-3-319-42076-9

Copyright Year: 2017

DOI
https://doi.org/10.1007/978-3-319-42076-9_12