The Role of Personality in Financial Decisions and Financial Crises

Noe, Thomas and Vulkan, Nir (2017) The Role of Personality in Financial Decisions and Financial Crises. In: Jokivuolle, Esa and Radu, Tunaru, (eds.) Preparing for the Next Financial Crisis. Cambridge University Press, Cambridge, pp. 139-156. ISBN 9781107185593

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In this chapter, we consider the role of personality traits in shaping the behavior of financial actors. We consider the promise of using personality to predict financial behavior. Personality is perhaps the ultimate “exogenous” predictive variable—stable throughout the lifetime of individuals and substantially heritable. At the same time, personality traits have demonstrated predictive power for agent actions. However, there are a number of inherent obstacles to incorporating personality into the standard economic model of financial decision making. We suggest some approaches to overcoming these obstacles.

Item Type: Book Section
Keywords: finance
Subject(s): Finance
Date Deposited: 02 Jun 2017 14:06
Last Modified: 04 Oct 2018 10:41
Funders: not applicable

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