公司理财精要版原书第12版英文版最新精品课件Ross_12e_PPT_Ch22
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• Which would you choose? There is no necessarily right answer, but most people will choose option A.
22-11
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
22-5
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
CHAPTER OUTLINE
• Introduction to Behavioral Finance • Biases • Framing Effects • Heuristics • Behavioral Finance and Market Efficiency • Market Efficiency and the Performance of
CHAPTER 22
BEHAVIORAL FINANCE: IMPLICATIONS FOR FINANCIAL MANAGEMENT
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
▪ Investors hurt themselves by trading. ▪ The accounts that have the most trading underperform the
accounts with the least trading. ▪ This is primarily because of the costs associated with trades.
EXAMPLE: FRAME DEPENDENCE
• Consider the following example: ▪ A disaster has occurred, 600 people are at risk, and you are in charge. You must choose between the two following rescue operations:
POOR OUTCOMES
• A suboptimal result in an investment decision can stem from one of two issues:
▪ You made a good decision, but an unlikely negative event occurred.
OVERCONFIDENCE AND GENDER
• It has also been shown that investor accounts registered to men underperform those registered to women.
▪ The reason is that men trade more on average. ▪ This extra trading is consistent with evidence from
OVERCONFIDENCE
• Example: 80 percent of drivers consider themselves to be above average.
• Business decisions require judgment of an unknown future.
• Overconfidence results in assuming forecasts are more precise than they actually are.
• House money
▪ More likely to risk money that has been “won” than that which has been “earned” (even though both represent wealth)
22-10
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
could be overconfident of a negative outcome (i.e., “overpessimistic”)
22-8
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
psychology that men have greater degrees of overconfidence than women.
22-7
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
22-6
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
• Show how the use of heuristics can lead to suboptimal financial decisions
• Define the shortcomings and limitations to market efficiency from the behavioral finance view
EXAMPLE: FRAME DEPENDENCE (CTD.)
• Now suppose your choices are as follows:
• SCENARIO 2 ▪ Option C: Exactly 400 people will die. ▪ Option D: There is a 1/3 chance that nobody will die and a 2/3 chance that all 600 will die.
22-9
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
FRAMING EFFECTS
• How a question is framed may impact the answer given or choice selected.
• Loss aversion (or break-even effect)
▪ Retain losing investments too long (violation of the sunk cost principle)
OVEROPTIMISM
• Example: overstating projected cash flows from a project, resulting in a higher than realistic NPV
• Overestimate the likelihood of a good outcome • Not the same as overconfidence, as someone
KEY CONCEPTS AND SKILLS
• Describe how behaviors such as overconfidence, overoptimism, and confirmation bias can affect decision making
• Demonstrate how framing effects can result in inconsistent and/or incorrect decisions
CONFIRMATION BIAS
• More weight is given to information that agrees with a preexisting opinion.
• Confirmation bias exists when a person tends to spend too much time trying to prove themselves correct rather than searching for information that might prove them wrong.
▪ You simply made a bad decision (i.e., cognitive error).
22-4
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
• SCENARIO 1 ▪ Option A: Exactly 200 people will be saved. ▪ Option B: There is a 1/3 chance that all 600 people will be saved and a 2/3 chance that no people will be saved.
Professional Money Managers 2பைடு நூலகம்-3
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
OVERCONFIDENCE AND STOCK MARKET TRADING
• It has been shown that overconfidence by investors leads to overestimation of their own ability to pick the best stocks, leading to excessive trading.
22-2
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
22-11
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
22-5
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
CHAPTER OUTLINE
• Introduction to Behavioral Finance • Biases • Framing Effects • Heuristics • Behavioral Finance and Market Efficiency • Market Efficiency and the Performance of
CHAPTER 22
BEHAVIORAL FINANCE: IMPLICATIONS FOR FINANCIAL MANAGEMENT
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
▪ Investors hurt themselves by trading. ▪ The accounts that have the most trading underperform the
accounts with the least trading. ▪ This is primarily because of the costs associated with trades.
EXAMPLE: FRAME DEPENDENCE
• Consider the following example: ▪ A disaster has occurred, 600 people are at risk, and you are in charge. You must choose between the two following rescue operations:
POOR OUTCOMES
• A suboptimal result in an investment decision can stem from one of two issues:
▪ You made a good decision, but an unlikely negative event occurred.
OVERCONFIDENCE AND GENDER
• It has also been shown that investor accounts registered to men underperform those registered to women.
▪ The reason is that men trade more on average. ▪ This extra trading is consistent with evidence from
OVERCONFIDENCE
• Example: 80 percent of drivers consider themselves to be above average.
• Business decisions require judgment of an unknown future.
• Overconfidence results in assuming forecasts are more precise than they actually are.
• House money
▪ More likely to risk money that has been “won” than that which has been “earned” (even though both represent wealth)
22-10
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
could be overconfident of a negative outcome (i.e., “overpessimistic”)
22-8
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
psychology that men have greater degrees of overconfidence than women.
22-7
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
22-6
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
• Show how the use of heuristics can lead to suboptimal financial decisions
• Define the shortcomings and limitations to market efficiency from the behavioral finance view
EXAMPLE: FRAME DEPENDENCE (CTD.)
• Now suppose your choices are as follows:
• SCENARIO 2 ▪ Option C: Exactly 400 people will die. ▪ Option D: There is a 1/3 chance that nobody will die and a 2/3 chance that all 600 will die.
22-9
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
FRAMING EFFECTS
• How a question is framed may impact the answer given or choice selected.
• Loss aversion (or break-even effect)
▪ Retain losing investments too long (violation of the sunk cost principle)
OVEROPTIMISM
• Example: overstating projected cash flows from a project, resulting in a higher than realistic NPV
• Overestimate the likelihood of a good outcome • Not the same as overconfidence, as someone
KEY CONCEPTS AND SKILLS
• Describe how behaviors such as overconfidence, overoptimism, and confirmation bias can affect decision making
• Demonstrate how framing effects can result in inconsistent and/or incorrect decisions
CONFIRMATION BIAS
• More weight is given to information that agrees with a preexisting opinion.
• Confirmation bias exists when a person tends to spend too much time trying to prove themselves correct rather than searching for information that might prove them wrong.
▪ You simply made a bad decision (i.e., cognitive error).
22-4
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
• SCENARIO 1 ▪ Option A: Exactly 200 people will be saved. ▪ Option B: There is a 1/3 chance that all 600 people will be saved and a 2/3 chance that no people will be saved.
Professional Money Managers 2பைடு நூலகம்-3
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
OVERCONFIDENCE AND STOCK MARKET TRADING
• It has been shown that overconfidence by investors leads to overestimation of their own ability to pick the best stocks, leading to excessive trading.
22-2
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.