Role of Narratives in Financial Decision Making from Perspective of Emotional Finance

Author(s):  
Asiye Nur Dumanlı
2011 ◽  
Author(s):  
Gergana Y. Nenkov ◽  
Deborah MacInnis ◽  
Maureen Morrin

2015 ◽  
Author(s):  
Gianni Brighetti ◽  
Caterina Lucarelli ◽  
Nicoletta Marinelli ◽  
Giulia Giansiracusa

2020 ◽  
Vol 4 (1) ◽  
pp. 40-50
Author(s):  
Ana Njegovanović

This paper is devoted to the study of functional relationships between behavioral finance, in particular when making decisions in the financial market, and the theory of reason and optogenetics. The purpose of this paper is to analyze the interaction of financial decision-making processes with the key principles of the mental state model (theory of mind) and define the role of optogenetics. The author notes that the use of the theory of reason in behavioral finance allows us to consider the key characteristics of the mental state of the subject of economic relations (thoughts, perceptions, desires, intentions, feelings have an internal mentalistic and experimental content). The author notes that decision-making at any level characterizes the complex network of scientific industries that allow us to understand the complexity of financial decision-making and the role and significance of the laws of thermodynamics and entropy. Modeling neural networks (based on the experimental approach), the paper presents the results of research in the context of analyzing behavioral changes in our brain under the following scenarios: at the stage of awareness of certain processes; if we participate (or do not) participate in these processes. The following conclusions are made in the paper: for the normal states of anxiety, the greatest number of possible configurations of interactions between brain networks, which represent the highest values of entropy is characteristic. These results are obtained from the study of a small number of participants in the experiment, but give an objective assessment and understanding of the complexity of the research and the guidance that include a scientific basis in the process of solving problems in the financial sphere (as an example: when trading in the financial market). Keywords: behavioral finance; theory of mind, financial decision making, optogenetics.


2021 ◽  
Vol 12 ◽  
Author(s):  
Peter Bossaerts

Over the last 15 years, a revolution has been taking place in neuroscience, whereby models and methods of economics have led to deeper insights into the neurobiological foundations of human decision-making. These have revealed a number of widespread mis-conceptions, among others, about the role of emotions. Furthermore, the findings suggest that a purely behavior-based approach to studying decisions may miss crucial features of human choice long appreciated in biology, such as Pavlovian approach. The findings could help economists formalize elusive concepts such as intuition, as I show here for financial “trading intuition.”


2021 ◽  
Vol VI (I) ◽  
pp. 200-213
Author(s):  
Sadaf Ambreen ◽  
Laiba Khalid ◽  
Aniqa Zubair

As an individual investor, it is incredible to have a successful performance return without financial knowledge. An organization's performance must be measured and analysed based on an adequate financial management system. In today's multifaceted financial scenery Financial Literacy is crucial as it does not only impact financial decisions at the business level but is also important for the country's development. Financial literacy has the importance of the backbone of society. The study adds a new mechanism of financial literacy. The main objective of this study is to determine further insight into the role of financial literacy on an individual's behaviour and attitude towards financial decision making. For analysis, the moderator impact of financial literacy on decision-making data of 100 individual investors has been collected from different banking sectors of Pakistan. The result of this study shows that financial literacy has a significant impact on financial decision making. This study delivers knowledge that can contribute to guiding coming studies, making policies, directors and instructors in their teaching.


Author(s):  
Ulkem Basdas

This chapter highlights the importance of financial education, its link with financial decision-making process, comparative status of different countries, and efforts to improve current situation. Unfortunately, there is no standard definition for neither financial education nor measures to quantify it. Therefore, this chapter first aims to provide a comprehensive definition in order to explain how financial knowledge affects the decision-making process. Then, financial literacy measures from previous studies over different countries would be discussed to show financial illiteracy problem is global. Lastly, solutions and recommendations would be discussed at three different levels: younger people, individuals, and national strategies.


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