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Handbook of Financial Decision Making
This accessible Handbook provides an essential entry point for those with an interest in the increasingly complex subject of financial decision making. It sheds light on new paradigms in society and the ways that new tools from private actors have affected financial decision making. Covering a broad range of key topics in the area, leading researchers summarize the state-of-the-art in their respective areas of expertise, delineating their projections for the future.
More Information
Critical Acclaim
Contributors
Contents
More Information
This accessible Handbook provides an essential entry point for those with an interest in the increasingly complex subject of financial decision making. It sheds light on new paradigms in society and the ways that new tools from private actors have affected financial decision making. Covering a broad range of key topics in the area, leading researchers summarize the state of the art in their respective areas of expertise, delineating their projections for the future.
Chapters cover both more traditional fields, such as regulation and the role of analysts, and emerging fields, such as artificial intelligence, neurofinance and robo-advising. Organized into three sections, the Handbook first deals with the natural and environmental factors that impact financial decision making, before moving on to examine the institutions, frameworks and tools created for the purpose of aiding the decision-making process. It concludes by looking at financial advisors, household finance and enabling financial decision making.
This Handbook will be of great value to scholars and researchers invested in the fields of finance, economic psychology, business management and development. Its comprehensive introduction to current research in accounting and finance alongside multiple topics on technology and decision making will be invaluable for practitioners, policy makers and regulators.
Chapters cover both more traditional fields, such as regulation and the role of analysts, and emerging fields, such as artificial intelligence, neurofinance and robo-advising. Organized into three sections, the Handbook first deals with the natural and environmental factors that impact financial decision making, before moving on to examine the institutions, frameworks and tools created for the purpose of aiding the decision-making process. It concludes by looking at financial advisors, household finance and enabling financial decision making.
This Handbook will be of great value to scholars and researchers invested in the fields of finance, economic psychology, business management and development. Its comprehensive introduction to current research in accounting and finance alongside multiple topics on technology and decision making will be invaluable for practitioners, policy makers and regulators.
Critical Acclaim
'With the rise of new kinds of data and approaches, the field of financial decisions is developing very rapidly. This volume provides excellent overviews of these developments with perspectives from leading experts in the field.'
– David Hirshleifer, University of Southern California, US
‘This is an excellent collection of lucidly written articles on recent developments in finance that highlight how the scope of the field is rapidly changing. The book will be a valuable source of information and inspiration for advanced undergraduate and graduate students, and will help draw more people to the field of finance. I will definitely be recommending it to my students.’
– Sudipto Dasgupta, Chinese University of Hong Kong, Hong Kong SAR, China
– David Hirshleifer, University of Southern California, US
‘This is an excellent collection of lucidly written articles on recent developments in finance that highlight how the scope of the field is rapidly changing. The book will be a valuable source of information and inspiration for advanced undergraduate and graduate students, and will help draw more people to the field of finance. I will definitely be recommending it to my students.’
– Sudipto Dasgupta, Chinese University of Hong Kong, Hong Kong SAR, China
Contributors
Contributors: Sumit Agarwal, Julie Agnew, Kenneth R. Ahern, Turan G. Bali, Natasha Bernhardt, Daniel Bradley, Francesco D’Acunto, Mandy T. Ellison, Jillian Grennan, Gilles Hilary, Allen Huang, Byoung-Hyoun Hwang, Satish Joshi, Mark Kamstra, W. Robert Knechel, S.P. Kothari, Lisa Kramer, Ranjani Krishnan, Kai Li, Hao Liang, David McLean, Steve Monahan, Alexander Nekrasov, Phuong Nguyen, Elise Payzan-LeNestour, Joel Peress, Kristina M. Rennekamp, Alberto G. Rossi, Siew Hong Teoh, Edward Thomas, Qinghai Wang, Quan Wen, Brian J. White, Shijia Wu, Haifeng You, Liandong Zhang, Luo Zuo
Contents
Contents:
PART I INTRODUCTION
Financial decision making: an overview 2
Gilles Hilary and David McLean
PART II NATURAL AND ENVIRONMENTAL FACTORS THAT
IMPACT FINANCIAL DECISION MAKING
Part II.1 Natural Factors
1 Limited attention and financial decision-making 17
Alexander Nekrasov, Siew Hong Teoh, and Shijia Wu
2 Seasonality in stock returns and government bond returns 36
Mark J. Kamstra and Lisa A. Kramer
3 Preference for lottery-like securities 63
Turan G. Bali and Quan Wen
4 Neurofinance 91
Elise Payzan-LeNestour
Part II.2 Environmental, Social, and Cultural Factors
5 Corporate culture: a review and directions for future research 112
Jillian Grennan and Kai Li
6 Geography and financial decision making 133
Qinghai Wang
7 Language in financial disclosures 154
Natasha Bernhardt, Mandy T. Ellison, Kristina M. Rennekamp, and
Brian J. White
8 The impact of word-of-mouth communication on investors’ decisions and
asset prices 171
Byoung-Hyoun Hwang
9 The role of media in financial decision-making 192
Kenneth R. Ahern and Joel Peress
PART III INSTITUTIONS, FRAMEWORKS, AND TOOLS
Part III.1 Institutions
10 Disclosure regulation: past, present, and future 215
S.P. Kothari, Liandong Zhang, and Luo Zuo
11 The audit in a modern economy 235
W. Robert Knechel and Eddie Thomas
Part III.2 Frameworks
12 Accounting and prices 256
Steven J. Monahan
13 Managerial accounting and decision-making 277
Satish Joshi and Ranjani Krishnan
14 Social responsibility in business and finance 296
Hao Liang and Tran Bao Phuong Nguyen
Part III.3 Tools: Computer-Based Advising
15 Artificial intelligence in financial decision-making 315
Allen H. Huang and Haifeng You
16 IT meets finance: financial decision-making in the digital era 336
Francesco D’Acunto and Alberto G. Rossi
PART IV SETTINGS: ADVISORS AND DECISION MAKING
17 Financial analysts 356
Daniel Bradley
18 Household financial decision making 375
Sumit Agarwal and Nithin Mannil
19 Behavioral finance and retirement planning in defined contribution plans 411
Julie Agnew
Index 432
PART I INTRODUCTION
Financial decision making: an overview 2
Gilles Hilary and David McLean
PART II NATURAL AND ENVIRONMENTAL FACTORS THAT
IMPACT FINANCIAL DECISION MAKING
Part II.1 Natural Factors
1 Limited attention and financial decision-making 17
Alexander Nekrasov, Siew Hong Teoh, and Shijia Wu
2 Seasonality in stock returns and government bond returns 36
Mark J. Kamstra and Lisa A. Kramer
3 Preference for lottery-like securities 63
Turan G. Bali and Quan Wen
4 Neurofinance 91
Elise Payzan-LeNestour
Part II.2 Environmental, Social, and Cultural Factors
5 Corporate culture: a review and directions for future research 112
Jillian Grennan and Kai Li
6 Geography and financial decision making 133
Qinghai Wang
7 Language in financial disclosures 154
Natasha Bernhardt, Mandy T. Ellison, Kristina M. Rennekamp, and
Brian J. White
8 The impact of word-of-mouth communication on investors’ decisions and
asset prices 171
Byoung-Hyoun Hwang
9 The role of media in financial decision-making 192
Kenneth R. Ahern and Joel Peress
PART III INSTITUTIONS, FRAMEWORKS, AND TOOLS
Part III.1 Institutions
10 Disclosure regulation: past, present, and future 215
S.P. Kothari, Liandong Zhang, and Luo Zuo
11 The audit in a modern economy 235
W. Robert Knechel and Eddie Thomas
Part III.2 Frameworks
12 Accounting and prices 256
Steven J. Monahan
13 Managerial accounting and decision-making 277
Satish Joshi and Ranjani Krishnan
14 Social responsibility in business and finance 296
Hao Liang and Tran Bao Phuong Nguyen
Part III.3 Tools: Computer-Based Advising
15 Artificial intelligence in financial decision-making 315
Allen H. Huang and Haifeng You
16 IT meets finance: financial decision-making in the digital era 336
Francesco D’Acunto and Alberto G. Rossi
PART IV SETTINGS: ADVISORS AND DECISION MAKING
17 Financial analysts 356
Daniel Bradley
18 Household financial decision making 375
Sumit Agarwal and Nithin Mannil
19 Behavioral finance and retirement planning in defined contribution plans 411
Julie Agnew
Index 432
