Banking sector and behavioral finance
Banking sector and behavioral finance

Summary/Abstract: Human is not rational but normal. This is the main discrepancy between Traditional and Behavioral Finance theories. Behavioral Finance postulates that humans have heuristics and biases when making judgments under uncertainty, and it is perfectly normal, whilst Traditional Finance accepts human as rational. The service sector, including banking, is more human oriented than others. Human (customer) makes banking- related decisions every day under uncertain conditions. So there should be some heuristics and biases. In this study we have discussed the possibilities over the biases in banking sector, such as sunk cost, reference dependence and the loss aversion

• Details
• Contents