This textbook examines the role of cognitive biases, emotional influences, and mental heuristics that shape investor behaviour and market outcomes. Designed to serve as a comprehensive resource, it integrates foundational concepts and advanced applications, ensuring utility for financial practitioners, academicians, and students alike.
This book will be essential for understanding the psychological underpinnings of financial behaviour and leverage this knowledge to advance personal and professional objectives in finance. The integration of behaviour tests and experiments further enhances its utility, enabling practitioners to identify and address behavioural biases systematically. It fills a critical gap in existing literature, which often prioritizes perspectives rooted in developed economies. It aims to place behavioural finance within the context of these markets and offers insights that are both domestically relevant and globally informed.
Written in a lucid yet academically robust manner, the book ensures accessibility without compromising the depth of analysis, making it suitable for both novice learners and experienced scholars. It would be useful as a core text for undergraduate and postgraduate students of Management, Commerce and Economics.
This textbook examines the role of cognitive biases, emotional influences, and mental heuristics that shape investor behaviour and market outcomes. Designed as a comprehensive resource, it integrates foundational concepts and advanced applications, ensuring utility for financial practitioners, academicians, and students alike.
Part I: Behavioural Finance: Foundations and Key Concepts
1. History of
Behavioural Finance
2. Foundations 1: Traditional Finance Theories
3.
Foundations 2: Behavioural Finance Theories
4. Neurofinance Part II:
Behavioural Biases
5. Introduction to Behavioural Biases
6. Heuristic Driven
Biases Illustrated
7. Frame Dependent Biases Illustrated Part III: Market
Forces
8. Market Inefficiency
9. Investment Strategies: Meanings and Types
Part IV: Emotional and social forces
10. Emotional finance
11. Social
influences and Moods Part V: Institutional investors behaviour
12.
Behavioural biases of institutional investors - Theoretical underpinnings
13.
Demystifying behavioural biases of portfolio managers, financial analysts,
financial planners and advisors Part VI: Practical Applications of
Behavioural Finance
14. Behavioural corporate finance
15. The psychology and
mechanism of financial planning Part VII: The Way Forward
16. Experimental
Finance
17. Future direction
Sujata Kapoor, a PhD in corporate finance, is an Associate Professor with Jaypee Business School, Noida (JBS). She has more than 20 years of academic experience. She has served as Program Director of MBA and BBA programmes at JBS. She is responsible for handling various advanced courses in finance at JBS. She has been instrumental in successfully launching the Centre of Distance and Online Education at Jaypee Institute of Information and Technology. Academically, she has earned an MBA (finance), MCom and BCom (Hons) from prestigious institutions in India. She has to her credit various publications in international journals (ABDC/Scopus/SCI indexed) such as Managerial Finance (B), Review of Behavioral Finance (B), Journal of Investing (B), Qualitative Research in Financial Markets (C) and Global Business Review (C). Her research interests include corporate finance and behavioural finance. She has successfully supervised several PhD candidates in the area of behavioural finance and sustainability marketing. She is a pioneer in financial surveys in the Indian context and developed survey instruments in the areas of dividend policy and behaviorial finance in collaboration with Professor Baker Kent of American University. She has also presented papers at several highly reputed international finance conferences such as the Financial Management Association Annual Meeting, Nashville, USA.
Jaya Mamta Prosad is Associate Professor in Finance at Lal Bahadur Shastri Institute of Management, Delhi. She holds a masters in Finance and PhD in Behavioural Finance. With over a decade of academic and research experience, Dr. Prosad specialises in corporate finance, financial markets, mergers and acquisitions, valuations, portfolio management, and behavioural finance.
Her research interests include investor behaviour, sustainable and climate finance, and financial resilience, with publications in reputed ABDC-indexed journals such as Qualitative Research in Financial Markets, Review of Behavioral Finance, Global Business Review, Finance India, and Cogent Economics & Finance. She has co-authored the textbook Behavioural Finance (Sage Publications, 2019).
Dr. Prosad has guided doctoral scholars, co-chaired research conferences and conducted faculty development programmes on advanced finance and research methods. Her current work explores behavioural dimensions of investment decision-making and sustainability-linked financial performance.
