Behavioral Finance 3.0

In this panel session, the President of the AFA, Ulrike Malmendier, proposes these questions concerning behavioral economics: Are we done? Can behavioral economics and finance be dissolved into the different traditional fields? She suggests that we can still go beyond the typical answers that social psychology gives us. Research can go deeper into where behavioral traits and choices come from, as well as go broader by, for example, looking at what happens in our brain and body when making financial decisions. Following traditional models and behavioral models, human models of economic decision-making are the next step for behavioral economics. How do lifetime experiences shape our brain, body, and (ir)rational decisions? This is important because the frictions and remedies are different for each model. Panelist Nicholas Barberis goes on to discuss the main areas of application for behavioral finance including asset prices, corporate finance, and household finance as well as the two main types of psychological assumption, that is, beliefs and preferences. For the rest of his talk, he comments on three topics of current interest: beliefs, cognitive foundations, and AI and machine learning. Finally, panelist Colin Camerer discusses the importance of the relationship between finance and science, such as in the field of neuroeconomics, and how scientific research can be used to understand why people make the financial decisions they do. Saturday, Jan 04, 2025 10:15 am - 12:15 pm PST Yerba Buena Salon 9 CHAIR: Ulrike Malmendier (University of California, Berkeley) PANELISTS: Nicholas Barberis (Yale University), Colin Camerer (California Institute of Technology) 0:00 Ulrike Malmendier, University of California, Berkeley 14:47 Nicholas Barberis, Yale University 42:17 Colin Camerer, California Institute of Technology 1:09:51 Q&A