The Behavioural Finance Revolution
Show Less

The Behavioural Finance Revolution

A New Approach to Financial Policies and Regulations

Edited by Riccardo Viale, Shabnam Mousavi, Barbara Alemanni and Umberto Filotto

Financial markets are complex. Regulators strive to predict ways in which they can malfunction and create rules to prevent this from happening, yet behavioural impacts are often overlooked. This book explores how behavioural finance can go hand-in-hand with traditional methods to help banks and regulators create better policies. It also demonstrates how the behavioural finance revolution has opened the way to a more integrated approach to the analysis of economic phenomena.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 7: Behavioral re-evolution: how behavioral economics has evolved and is evolving

Enrico Maria Cervellati


This chapter presents a personal (thus biased) view of the evolution of behavioral economics, which the author believes constitutes a revolution in economics or, better, a re-evolution of economics, since economics is behavioral in nature, it was behavioral at its outset, and finally returned to being behavioral. The chapter claims that most classical economists were behavioral economists since they considered psychology and sociology in their studies. While Simon’s idea of limited rationality anticipated behavioral economics, the work of Kahneman and Tversky and of the first modern behavioral economists such as Thaler, Shiller, Shefrin and Statman, among others, can be considered the first generation of behavioral studies. In recent years, behavioral economists went ‘in action’, suggesting solutions to biases or how to exploit them to the benefit of people. It is now time for a third generation of ‘personalized’ behavioral economics that accounts for individual personalities.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.