Behavioral finance studies the application of psychology to finance, with a focus on
individual-level cognitive biases. I describe here the sources of judgment and decision …

This chapter surveys the literature on bubbles, financial crises, and systemic risk. The first
part of the chapter provides a brief historical account of bubbles and financial crisis. The …

Winner of the Nobel Prize in Economics Get ready to change the way you think about
economics. Nobel laureate Richard H. Thaler has spent his career studying the radical …

Behavioral finance tries to make sense of financial data using models that are based on
psychologically accurate assumptions about people's beliefs, preferences, and cognitive …

We present an extrapolative model of bubbles. In the model, many investors form their
demand for a risky asset by weighing two signals—an average of the asset's past price …

Rational bubbles under symmetric information are studied in settings in which all agents
have rational expectations and share the same information. There are several theoretical …

Disclosure: In addition to being a professor at Yale University, the author is currently working
part-time with Standard & Poor's to produce home price indices; with the Chicago Mercantile …

Todays problems often arise as unintended consequences of yesterdays solutions. Social
systems often suffer from policy resistance, the tendency for well-intentioned interventions to …

Financial decisions are among the most important life-sha** decisions that people make.
We review facts about financial decisions and what cognitive and neural processes …

Experimental economists are leaving the reservation. They are recruiting subjects in the field
rather than in the classroom, using field goods rather than induced valuations, and using …