EC4024 Lecture 17: Behavioural Finance 1Stephen Kinsella: www.stephenkinsella.net

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RECAP:

EMH/AMH

Expected Utility Theory

Behavioural Finance

Prospect Theory

Recap

Efficient Markets HypothesisAdaptive Markets HypothesisExpected Utility Theory

Expected Utility Theory www.xkvd.com

Prospect Theory

Kahneman & Tversky (1979)Theory is: people treat losses differently to gains.

Derivation

Application

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