Abstract:

Much of economic and financial theory is based on the notion that individuals act rationally and consider all information in decision-making. However, substantial evidence points to the contrary. A case in point is stock trading, where academic studies documented many examples of irrational behavior and repeated errors in judgment. What are the factors that lead to this behavior by otherwise rational, reasonably intelligent humans, engaged in the important task of increasing their money? This presentation examines how the Stock Exchange of Thailand, in its efforts to win more investors, first studied their emotionally driven decision-making.