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Episode 11: How Biases and Heuristics Cause Financial Decision-Making Errors
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In this four and final podcast on heuristics and biases, we connect the previously learned biases and heuristics of the last three episodes to our financial decision making.
01:47 Heuristics Review
03:05 Diversification Heuristic (Naive Diversification)
11:16 Information Overload on Retirement Investment Decisions
13:52 Ambiguity in Investment Decisions (Under-diversification)
14:45 Home Bias Overview
16:50 Why the Home Bias Exists (3 Reasons)
20:21 Next Level Home Bias (Regional and Localized Home Bias)
23:10 Hedging our Happiness
25:05 Other Factors Driving Home Bias
26:20 Anchoring and Adjustment in Real Estate Appraisals
28:35 Status Quo Bias and Our Asset Allocation Decisions
33:20 Myopia and Frequently Feeling Losses in Our Portfolio
I hope you enjoy the content and learn all about the topic of Behavioral Finance. I've set up the first few podcasts as mini lectures of my Behavioral Finance course that I teach at Butler University each semester. The goal of this podcast is to provide a comprehensive look into the topic of Behavioral Finance - for free!
#behavioralfinance #psychologyofmoney #financialdecisions
References: Bernartzi and Thaler (2001) - Naive Diversification
https://www.aeaweb.org/articles?id=10.1257/aer.91.1.79
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Bryan Foltice Behavioral Finance Website - www.bryanfoltice.com
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Disclaimer: www.bryanfoltice.com/cv
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