Best Reference Books – Behavioural Finance

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We have compiled the list of Top 10 Best Reference Books on Behavioural Finance subject. These books are used by students of top universities, institutes and colleges. Here is the full list of top 10 best books on Behavioural Finance along with reviews.

Kindly note that we have put a lot of effort into researching the best books on Behavioural Finance subject and came out with a recommended list of top 10 best books. The table below contains the Name of these best books, their authors, publishers and an unbiased review of books on "Behavioural Finance" as well as links to the Amazon website to directly purchase these books. As an Amazon Associate, we earn from qualifying purchases, but this does not impact our reviews, comparisons, and listing of these top books; the table serves as a ready reckoner list of these best books.

1. “Behavioural Finance” by Shuchita Singh and Shilpa Bahi

“Behavioural Finance” Book Review: This book is dedicated tro Behavioural Finance which is a modern field of finance. This book has been designed keeping in mind the increasing occurrences of various anomalies of financial markets. It teaches about the theories and concepts put forward by the researchers and practitioners in financial markets. Efforts have been made to showcase the economic downturn and the role of this field in it. Facts in “Do You Know” boxes, abbreviations and model test papers for practice have been provided for in-depth learning. All latest information and views by experts in this field have been provided in the book.

2. “Behavioural Finance” by William Forbes

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“Behavioural Finance” Book Review: The book addresses how behavioural approach to a financial decision making can add value to standard finance. The author has kept largely to modelling strategies that those trained in economics will feel comfortable with. The book is a summary of both a rapidly growing field of research and a reflection of a discipline about to rupture as new ideas emerge. Discounting and Discounted Utility Model has been discussed. In the Bubbles chapter, an example from the 1929 Stock Market Crash has been taken. Part two of this book is focused on asset pricing which include topics like noise traders, overconfidence and optimism, asset pricing under Prospect Theory, momentum, etc. Insider Trading and Corporate Finance has been explored in detail.

3. “Thinking, Fast and Slow” by Daniel Kahneman

“Thinking, Fast and Slow” Book Review: This book will help the reader to make better decisions in his/her personal and professional life. It will help in developing slow, rational thinking instead of the usual fast, intuitive thinking. Examples have been cited to show the miracles and mistakes of one’s conscious and unconscious thinking. The book presents the author’s understanding of judgement, which has been shaped by psychological discoveries of recent decades. It will urge the reader to improve the ability to identify and understand the errors of choice, in others and the reader himself. It provides an accurate diagnosis to limit the damage that bad choices often cause.

4. “Behavioural Finance” by Chandra

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“Behavioural Finance” Book Review: Part One of this book talks about Neoclassical Finance and Behavioural challenge. This is backed up by Rational Markets Hypothesis. Foundations of Rational Finance are discussed which include Expected Utility Theory, Modern Portfolio theory, Agency theory, etc. Next, foundations of behavioural finance are discussed, which include heuristics and biases, self-deception, Prospect Theory, Emotional factors and Social Forces, etc. The Equity Premium Puzzle is an important concept which has been discussed under Market Outcomes. Chapters related to Behavioural Corporate Finance have also been included as a major portion of this book. Solved Problems and Discussion Questions have been given for in-depth learning.

5. “Value Investing and Behavioral Finance” by Suyash Bhatt

“Value Investing and Behavioral Finance” Book Review: This book is a comprehensive guide for investors who want to select stocks for investment. It tries to provide reasons as to why the market is behaving in a particular way. It explains how some individuals make use of market inefficiencies by buying something at one place, and selling it in another place at a higher rate. Errors often made by behavioural finance practitioners have been cited. Value Investing is thoroughly explained in this book which is a defensive investment strategy. The author portrays how Value Investing and Behavioural Finance are two sides of the same coin.

6. “Understanding Behavioral Finance” by Lucy Ackert

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“Understanding Behavioral Finance” Book Review: This book is an organized and practical approach to Behavioural Finance. Psychological principles of behavioural finance have been given quite importance in this book. It helps the reader understand how human behaviour impacts decisions of investors and practitioners. It also shows how social forces influence one’s choices. Here, the inferences of Behavioural Finance on retirements, pensions, education, etc is discussed. Money Management in behavioural investing has also been explored in detail.

7. “Behavioral Finance” by Kadir C Yalcin

“Behavioral Finance” Book Review: This book talks about Behavioural Finance which is an area of finance dealing with psychological aspects of financial decision making. In heuristics and biases, it is shown that males tend to be more biased than females in terms of common behavioural biases. It also proves that mental accounting, representativeness, cognitive dissonance increase as education level rises. Oppositely, the idea of control and ambiguity aversion has an inverse correlation with education level. The book aims at discovering how investors behave when making financial decisions. Experimental results in this book depict that biases under self-deception have an upper hand which leads to investors suffering from cognitive disabilities.

8. “Behavioural Technical Analysis: An introduction to behavioural finance and its role in technical analysis” by Paul V Azzopardi

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“Behavioural Technical Analysis: An introduction to behavioural finance and its role in technical analysis” Book Review: This book is for traders who want to gain knowledge about the basics of Behavioural Finance with an in-depth learning of it’s role in technical analysis. It provides an introduction to the six main areas of behavioural finance. It discusses detailed implications of behavioural finance on three key technical analysis techniques: study of extremes, study of trends and support and resistance. With the depiction of observed technical patterns, it tries to formulate profitable investment strategies. Dealing with complexity, how humans perceive what is around them, sense of self, aversion to risk, the impact of society and crowds and gender are all important subfields of behavioural finance discussed in this book.

9. “The Foundations of Behavioral Economic Analysis” by Sanjit Dhami

“The Foundations of Behavioral Economic Analysis” Book Review: In this book, an approach to the modern economic studies in the area of Behavioural Economics has been made. It spans all aspects from psychological foundations to most recent advances in this field. It provides seamlessly integrating theory with evidence from experiments. It even includes recent subtopics such as behavioural welfare economics and neuroeconomics. It covers a balanced discussion of the philosophical and methodological differences and similarities between behavioural and neoclassical approaches to microeconomics. It binds together numerous experimental findings, theoretical insights and exciting applications across all relevant fields of behavioral research.

10. “Behavioral Finance: Psychology, Decision-Making, and Markets” by Lucy Ackert and Richard Deaves

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“Behavioral Finance: Psychology, Decision-Making, and Markets” Book Review: This book is an organized and practical approach to Behavioural Finance. Psychological principles of behavioural finance have been given quite importance in this book. It helps the reader understand how human behaviour impacts decisions of investors and practitioners. It also shows how social forces influence one’s choices. Here, the inferences of Behavioural Finance on retirements, pensions, education, etc is discussed. Part One discusses Conventional Finance, Prospect Theory and Market Efficiency. Next, Investor Behaviour and Social Forces are topics discussed in detail. Behavioural explanations for anomalies have been provided. It also helps in learning retirement saving behavior and improving DC pensions.

People who are searching for Free downloads of books and free pdf copies of these top 10 books on Behavioural Finance – we would like to mention that we don’t have free downloadable pdf copies of these good books and one should look for free pdf copies from these Authors only if they have explicitly made it free to download and read them.

We have created a collection of best reference books on "Behavioural Finance" so that one can readily see the list of top books on "Behavioural Finance" and buy the books either online or offline.

If any more book needs to be added to the list of best books on Behavioural Finance subject, please let us know.

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Manish Bhojasia - Founder & CTO at Sanfoundry
Manish Bhojasia, a technology veteran with 20+ years @ Cisco & Wipro, is Founder and CTO at Sanfoundry. He is Linux Kernel Developer & SAN Architect and is passionate about competency developments in these areas. He lives in Bangalore and delivers focused training sessions to IT professionals in Linux Kernel, Linux Debugging, Linux Device Drivers, Linux Networking, Linux Storage, Advanced C Programming, SAN Storage Technologies, SCSI Internals & Storage Protocols such as iSCSI & Fiber Channel. Stay connected with him @ LinkedIn | Youtube | Instagram | Facebook | Twitter