This book is the first to demonstrate the practical implications of an important, yet under-considered area of psychology in helping traders and investors understand the biases and attribution errors that drive unpredictable behaviour on the trading floor. Readers will improve their chances of trading successfully by learning where cognitive biases lead to errors in stock analysis and how these biases can be used to predict behavior in market participants.Focusing on the three majo...

Theory of Mind (ToM) is the term used for our ability to predict and explain the behaviour of ourselves and others. Accounts of this theory have so far fallen into two competing types: Simulation Theory and ‘Theory Theory’. In contrast with Theory Theory, Simulation Theory argues that we predict behaviour not by employing a model of people, but by replicating others’ thoughts and feelings. This book presents a novel defence of Simulation Theory, reviewing the major challenges against it an...

*Major New York Times Bestseller*More than 2.6 million copies sold*One of The New York Times Book Review's ten best books of the year*Selected by The Wall Street Journal as one of the best nonfiction books of the year*Presidential Medal of Freedom Recipient*Daniel Kahneman's work with Amos Tversky is the subject of Michael Lewis's best-selling The Undoing Project: A Friendship That Changed O...

This book presents the definitive exposition of 'prospect theory', a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tversky, whose contributions are collected here for the first time. While remaining within a rational choice framework, prospect theory delivers more...

Make RATIONAL decisions in the IRRATIONAL world of investing"Readers will find within these pages new truths that will help transform their thinking. This is more relevant than the latest strategies, trading systems, or technical chart formations."--William J. Brodsky, Chairman and CEO, Chicago Board Options Exchange"Koppel offers pioneering insights, backed by substantial research, that help explain how psychology influ...

World-changing books about finance aren't built in a day. Adam Smith needed 17 years to write The Wealth of Nations. John Maynard Keynes took six years to write The General Theory of Employment, Interest and Money. Yes, those are lofty comparisons. And yes, later histories will record whether the socionomic theory of finance actually did replace conventional macroeconomics. Even so: You can read The Socionomic Theory of Finance and make your own judgement, today. The non-textbook style mak...

Forecasting Financial Markets provides a compelling insight into the psychology of trading behaviour and shows how "following the herd" can have disastrous results. It demonstrates how your ability to make money in the world's financial markets depends critically on your ability to make decisions independently of the crowd. Given the impact of the global credit crunch, it has become even more essential to be able to distinguish between short-term and longer-term t...

LEVERAGE YOUR MOST POWERFUL TRADING ASSET: YOUR PERSONALITYThe Mental Edge in Trading explains the critical link between successful trading and personality traits--and it gives you the tools to use this information to make smarter trades.A highly trained psychiatrist, Dr. Jason Williams, son of legendary trader Larry Williams, explains how to assess and measure your innate personality traits and align them with your trading style for more profitable trading on a ...

Game theory, the formalized study of strategy, began in the 1940s by asking how emotionless geniuses should play games, but ignored until recently how average people with emotions and limited foresight actually play games. This book marks the first substantial and authoritative effort to close this gap. Colin Camerer, one of the field's leading figures, uses psychological principles and hundreds of experiments to develop mathematical theories of reciprocity, limited strategizing, and learn...

Not knowing statistics can lead to a loss of money, time, and accurate information.What am I looking at? What do these numbers mean? Why? These are frequent thoughts of those who don't know much about statistics."I'm not a number's person" is not a good excuse to avoid learning the basics of this essential skill. Are you a person who earns money? Do you shop at the supermarket? Do you vote? Do you read the news? I'm sure you do.Learn to make...

Beginning with its first edition and through subsequent editions, Thinking and Deciding has established itself as the required text and important reference work for students and scholars of human cognition and rationality. In this fourth edition, first published in 2007, Jonathan Baron retains the comprehensive attention to the key questions addressed in the previous editions - how should we think? What, if anything, keeps us from thinking that way? How can we improve our thinking and deci...

Twenty years ago, behavioral economics did not exist as a field. Most economists were deeply skeptical--even antagonistic--toward the idea of importing insights from psychology into their field. Today, behavioral economics has become virtually mainstream. It is well represented in prominent journals and top economics departments, and behavioral economists, including several contributors to this volume, have garnered some of the most prestigious awards in the profession. This book as...