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Hersh Shefrin (born in Winnipeg, Manitoba) is a Canadian economist best known for his pioneering work in behavioral finance.
Shefrin received his B.S. from University of Manitoba in 1970. At the University of Waterloo in 1971 he received his M.S. in mathematics. He then obtained a Ph.D. in economics from the London School of Economics in 1974, after which he became assistant professor at the University of Rochester. In 1979 he was appointed professor at the Santa Clara University, first in the department of economics and then in 1990 to the department of finance.
Shefrin holds an honorary doctorate from the University of Oulu, Finland.
Shefrin's research articles have been published in many economics and finance journals, in particular: the Journal of Finance , the Journal of Financial Economics , the Review of Financial Studies , the Journal of Financial and Quantitative Analysis , Financial Management, the Financial Analysts Journal , and the Journal of Portfolio Management . Shefrin has written a number of influential books on behavioral finance and its applications to corporate finance and corporate culture.
Shefrin and his wife, Arna, were married in 1970.
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Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, which is the study of production, distribution, and consumption of money, assets, goods and services . Finance activities take place in financial systems at various scopes, thus the field can be roughly divided into personal, corporate, and public finance.
Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade". Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing and corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital. It thus provides the theoretical underpinning for much of finance.
In finance, the capital asset pricing model (CAPM) is a model used to determine a theoretically appropriate required rate of return of an asset, to make decisions about adding assets to a well-diversified portfolio.
William Forsyth Sharpe is an American economist. He is the STANCO 25 Professor of Finance, Emeritus at Stanford University's Graduate School of Business, and the winner of the 1990 Nobel Memorial Prize in Economic Sciences.
Stephen Alan "Steve" Ross was the inaugural Franco Modigliani Professor of Financial Economics at the MIT Sloan School of Management after a long career as the Sterling Professor of Economics and Finance at the Yale School of Management. He is known for initiating several important theories and models in financial economics. He was a widely published author in finance and economics, and was a coauthor of a best-selling Corporate Finance textbook.
Sanford "Sandy" Jay Grossman is an American economist and hedge fund manager specializing in quantitative finance. Grossman’s research has spanned the analysis of information in securities markets, corporate structure, property rights, and optimal dynamic risk management. He has published widely in leading economic and business journals, including American Economic Review, Journal of Econometrics, Econometrica, and Journal of Finance. His research in macroeconomics, finance, and risk management has earned numerous awards. Grossman is currently Chairman and CEO of QFS Asset Management, an affiliate of which he founded in 1988. QFS Asset Management shut down its sole remaining hedge fund in January 2014.
Financial modeling is the task of building an abstract representation of a real world financial situation. This is a mathematical model designed to represent the performance of a financial asset or portfolio of a business, project, or any other investment.
Robert Ward Vishny is an American economist and is the Myron S. Scholes Distinguished Service Professor of Finance at the University of Chicago Booth School of Business. He was the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago Booth School of Business.
The goals of experimental finance are to understand human and market behavior in settings relevant to finance. Experiments are synthetic economic environments created by researchers specifically to answer research questions. This might involve, for example, establishing different market settings and environments to observe experimentally and analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanism and returns processes.
The disposition effect is an anomaly discovered in behavioral finance. It relates to the tendency of investors to sell assets that have increased in value, while keeping assets that have dropped in value.
Aswath Damodaran, is a Professor of Finance at the Stern School of Business at New York University, where he teaches corporate finance and equity valuation.
The following outline is provided as an overview of and topical guide to finance:
Chi-fu Huang is a private investor, a retired hedge fund manager, and a former finance academic. He has made contributions to the theory of financial economics, writing on dynamic general equilibrium theory, intertemporal utility theory, and the theory of individual consumption and portfolio decisions.
Edwin Elton is a Nomura Professor of Finance at New York University Stern School of Business and Academic Director of the Stern Doctoral Program.
Xavier Gabaix is a French economist, currently the Pershing Square Professor of Economics and Finance at Harvard University. He has been listed among the top 8 young economists in the world by The Economist. He holds a B.A. in Mathematics from the Ecole Normale Supérieure, as well as a Ph.D. in Economics from Harvard University.
Maslowian portfolio theory (MaPT) creates a normative portfolio theory based on human needs as described by Abraham Maslow. It is in general agreement with behavioral portfolio theory, and is explained in Maslowian Portfolio Theory: An alternative formulation of the Behavioural Portfolio Theory, and was first observed in Behavioural Finance and Decision Making in Financial Markets.
Behavioral portfolio theory (BPT), put forth in 2000 by Shefrin and Statman, provides an alternative to the assumption that the ultimate motivation for investors is the maximization of the value of their portfolios. It suggests that investors have varied aims and create an investment portfolio that meets a broad range of goals. It does not follow the same principles as the capital asset pricing model, modern portfolio theory and the arbitrage pricing theory. A behavioral portfolio bears a strong resemblance to a pyramid with distinct layers. Each layer has well defined goals. The base layer is devised in a way that it is meant to prevent financial disaster, whereas, the upper layer is devised to attempt to maximize returns, an attempt to provide a shot at becoming rich.
Quantitative analysis is the use of mathematical and statistical methods in finance and investment management. Those working in the field are quantitative analysts (quants). Quants tend to specialize in specific areas which may include derivative structuring or pricing, risk management, investment management and other related finance occupations. The occupation is similar to those in industrial mathematics in other industries. The process usually consists of searching vast databases for patterns, such as correlations among liquid assets or price-movement patterns.
David Alan Easley is an American economist. Easley is the Henry Scarborough Professor of Social Science and is a professor of information science at Cornell University.
Werner F.M. De Bondt is one of the founders in the field of behavioral finance. He is also the founding director of Richard H. Driehaus Center for Behavioral Finance at DePaul University in Chicago. Previously, he was the Frank Graner Professor of Investment Management at the University of Wisconsin-Madison, and the Thomas F. Gleed Chair of Business Administration at Albers School of Business and Economics at the Seattle University.
