The Psychology of Risk: The BehavioralFinancePerspective

ArXiv ID: ssrn-1155822 “View on arXiv”

Authors: Unknown

Abstract

Since the mid-1970s, hundreds of academic studies have been conducted in risk perception-oriented research within the social sciences (e.g., nonfinancial areas)

Keywords: Risk Perception, Social Sciences, Behavioral Economics, Heuristics, Multi-Asset

Complexity vs Empirical Score

• Math Complexity: 1.0/10
• Empirical Rigor: 0.5/10
• Quadrant: Philosophers
• Why: The paper is a theoretical literature review that synthesizes existing behavioral finance concepts without introducing new mathematical models or conducting empirical backtests.

  flowchart TD
    A["Research Question<br>How do heuristics influence<br>risk perception in financial decisions?"] --> B["Methodology<br>Literature Review & Empirical Analysis"]
    B --> C["Data Inputs<br>Multi-Asset Market Data &<br>Social Science Risk Studies"]
    C --> D["Computational Process<br>Behavioral Modeling &<br>Heuristic Simulation"]
    D --> E["Key Findings<br>Cognitive biases distort risk<br>assessment across asset classes"]
    E --> F["Outcomes<br>Enhanced Behavioral Finance<br>Framework for Multi-Asset Investment"]