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dc.contributor.advisorMoffit, Timothy E.
dc.contributor.authorWasko, Jake
dc.descriptionvi, 48 p.en_US
dc.description.abstractBehavioral finance, a concept that began in the late 20th century, is a pillar of finance that has made its way into a solid structure of current theory. The goal of behavioral finance is to challenge the assumptions of the traditional theories of rationality, efficient market hypothesis and the modern portfolio theory. The theory looks at how under most cases people do not fit the assumptions that have dominated the markets over the past century. Behavioral finance looks at this claim by stating that people have different behavioral biases, and that individuals are not as rational as past theories explain. This study utilizes the tools of a survey in which 25 individual investors were surveyed to try to uncover any variances from a rational model. This study found that all participants, when tested for four different behavioral characteristics, exhibited at least one of the behavioral biases. Furthermore, this study found that even through some participants indicated that they were risk seeking, it was contradicted through the uncovering of these biases. This study attempts to further the argument that most investors are indeed not rational, and that the markets and theories should not treat them as such. Future research can be extended from this. For example, researchers could attempt to uncover even more biases that people have and develop a concrete model as to how a portfolio should accurately be adjusted for the presence of particular behaviors.en_US
dc.relation.ispartofKalamazoo College Economics and Business Senior Individualized Projects Collection
dc.rightsU.S. copyright laws protect this material. Commercial use or distribution of this material is not permitted without prior written permission of the copyright holder.
dc.titleExaming the Effects of Investor Biases on Asset Allocationen_US
KCollege.Access.ContactIf you are not a current Kalamazoo College student, faculty, or staff member, email to request access to this thesis.

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  • Economics and Business Senior Individualized Projects [1145]
    This collection includes Senior Individualized Projects (SIP's) completed in the Economics and Business Department. Abstracts are generally available to the public, but PDF files are available only to current Kalamazoo College students, faculty, and staff.

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