The Behavioral Economics of Foreign Exchange Markets: A Psychological View on Human Expectation Formation in Foreign Exchange Markets

ISBN-13: 9783631548141 / Angielski / Miękka / 2006 / 334 str.

Schmidt, Robert

Opis

This book deals with psychological factors, which may be important for understanding the observable exchange rate movements. Thus, the study belongs to the new research field of behavioral economics, which considers the relevance of psychological factors in economic contexts. The main objective of behavioral economists is to develop a more realistic view of the actual human behavior in the context of economics. Central to the concept of behavioral economics is the assumption that humans actual behavior deviates from the ideal of economic rationality due to at least two reasons: first, decisions are usually based on an incomplete information basis and, second, the information processing of human beings is limited by their computational capacities. Due to these limitations people are forced to apply simple heuristics in information processing. Our aim is to analyze the relevance of simple heuristics in the context of foreign exchange markets. In our view, the decision situation in foreign exchange markets can serve as a prime example for decision situations in which simple heuristics are especially relevant as the complexity of the decision situation is very high."

Spis treści

Contents: The exchange rate disconnect puzzle - Patterns of exchange rate dynamics and the role of speculation - Behavioral economics as an alternative approach - Experimental and empirical evidence.

O autorze

The Author: Robert Schmidt, born in 1974, studied economics at the University of Würzburg and received his master's degree in 2000 (Diplom-Volkswirt). From 2001 to 2004 he was a doctoral student at the University of Würzburg and worked there as a research assistant at the chair for monetary policy and international economics. In 2005 the author received his doctoral degree. Since 2004 he has been working as a managing partner in a company specialized in drive technology.