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| Preface | |
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| Psychology and Finance | |
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| Traditional Versus Behavioral Finance | |
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| Prediction | |
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| Behavioral Finance | |
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| Sources of Cognitive Errors | |
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| Bias and Wealth Impact | |
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| What to Expect | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Overconfidence | |
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| Overconfidence Affects Investor Decisions | |
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| Overconfident Trading | |
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| Overconfidence and the Market | |
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| Overconfidence and Risk | |
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| Illusion of Knowledge | |
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| Who Is Overconfident? | |
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| Illusion of Control | |
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| Choice | |
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| Outcome Sequence | |
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| Task Familiarity | |
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| Information | |
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| Active Involvement | |
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| Past Successes | |
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| Online Trading | |
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| Online Trading and Performance | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Pride and Regret | |
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| Disposition Effect | |
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| Disposition Effect and Wealth | |
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| Tests of Avoiding Regret and Seeking Pride | |
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| International Tests of the Disposition Effect | |
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| Disposition Outside the Stock Market | |
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| Selling Winners Too Soon and Holding Losers Too Long | |
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| Disposition Effect and News | |
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| Reference Points | |
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| Reference Point Adaptation | |
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| Can the Disposition Effect Impact the Market? | |
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| Disposition and Investor Sophistication | |
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| Buying Back Stock Previously Sold | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Risk Perceptions | |
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| House-Money Effect | |
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| Snakebite (or Risk Aversion) | |
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| Trying to Break Even | |
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| Effect on Investors | |
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| Endowment (or Status Quo Bias) Effects | |
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| Endowment and Investors | |
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| Perception of Investment Risk | |
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| Memory and Decision Making | |
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| Memory and Investment Decisions | |
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| Cognitive Dissonance | |
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| Cognitive Dissonance and Investing | |
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| Nature or Nurture? | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Decision Frames | |
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| Framing and Choice | |
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| Framing and Investing | |
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| Framing and the Risk-Return Relationship | |
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| Framing and Prediction | |
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| Thinking Mode and Decision Processes | |
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| Measuring Thinking Mode | |
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| Risk Framing and Thinking Style | |
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| Framing Financial Decisions | |
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| Pension Decisions | |
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| Payday Loans | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Mental Accounting | |
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| Mental Budgeting | |
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| Matching Costs to Benefits | |
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| Matching Debt | |
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| Sunk-Cost Effect | |
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| Economic Impact | |
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| Mental Accounting and Investing | |
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| Investor Trading | |
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| Asset Allocation | |
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| Market Impart | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Forming Portfolios | |
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| Modern Portfolio Theory | |
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| Mental Accounting and Portfolios | |
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| Perceptions on Risk | |
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| Risk Perception in the Real World | |
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| Building Behavioral Portfolios | |
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| Household Portfolios | |
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| Preferred Risk Habitat | |
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| Na�ve Diversification | |
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| Retirement Plans | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Representativeness and Familiarity | |
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| Representativeness | |
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| Representativeness and Investing | |
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| Extrapolation Bias | |
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| Familiarity | |
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| Familiarity Breeds Investment | |
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| Local Bias | |
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| Market Impacts | |
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| Familiarity Breeds Investment Problems | |
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| Combining Familiarity and Representativeness Biases | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Social Interaction and Investing | |
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| Talking the Talk | |
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| Imitate Thy Neighbor's Portfolio | |
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| Social Environment | |
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| Investment Clubs | |
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| Investment Club Performance | |
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| Investment Clubs and Social Dynamics | |
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| The Media | |
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| Language | |
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| Speed Is Not of the Essence | |
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| Herding | |
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| Herding into Stocks | |
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| "A Rose.com by Any Other Name" | |
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| Short-Term Focus | |
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| Faith | |
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| Social Validation | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Emotion and Investment Decisions | |
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| Feelings and Decisions | |
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| Feelings and Finance | |
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| Feelings Affect Investment Decisions | |
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| Sunshine | |
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| Negative Emotions | |
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| Optimism | |
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| Sentiment | |
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| Market Bubbles | |
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| The Thrills of Investing | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Self-Control and Decision Making | |
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| Short-Term Versus Long-Term Focus | |
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| Controlling Yourself | |
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| Saving and Self-Control | |
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| 401(k) and IRA Plans | |
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| Self-Control and Dividends | |
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| Beating the Biases | |
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| Understand the Biases | |
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| Know Why You Are Investing | |
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| Have Quantitative Investment Criteria | |
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| Diversify | |
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| Control Your Investing Environment | |
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| Additional Rules of Thumb | |
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| Maybe an Advisor is Needed? | |
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| Using Biases for Good | |
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| Save More Tomorrow | |
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| Save and Win | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Psychology in the Mortgage Crisis | |
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| Mortgage Industry | |
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| Subprime Mortgages | |
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| Emotional Stress and Frame Manipulation | |
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| Society Cross-Subsidy | |
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| Households in Distress | |
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| Mortgage Default: Social Norms and Psychology | |
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| Government's Use of Psychology in Mortgage Social Policy | |
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| Psychology Further Down the Mortgage Supply Chain | |
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| Summary | |
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| Questions | |
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| Notes | |
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| Credits | |
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| Index | |