Paper: SSRN 332266

Abstract

Behavioral finance argues that some financial phenomena can plausibly be understood using models in which some agents are not fully rational. The field has two

Complexity vs Empirical Score

  • Math Complexity: 2.0/10
  • Empirical Rigor: 1.0/10
  • Quadrant: Philosophers — conceptual discussion, limited math and data

Why this score: The paper is a comprehensive literature review discussing concepts like limits to arbitrage and psychology, which are conceptual and theoretical, lacking dense mathematical derivations or empirical backtesting results.

Research Flowchart

  flowchart TD
  A["Research Goal: Review behavioral finance models with non-rational agents"] --> B["Data/Inputs: Empirical asset pricing anomalies, survey data"]
  B --> C["Key Methodology: Literature survey, model comparison"]
  C --> D["Computational Processes: Psychological bias analysis, agent-based simulations"]
  D --> E{"Key Findings/Outcomes"}
  E --> F["Deviations from rational expectations"]
  E --> G["Persistent equity anomalies explained"]
  E --> H["Limited arbitrage success"]