Chapter 1 - The Structure of a Behavioral Revolution
§ 1.1 - Abnormal markets, irrational investors
§ 1.2 - Anomalies, fast and slow
§ 1.3 - Sell in May and go away?
§ 1.4 - Law on the market
§ 1.5 - Raw emotion
§ 1.6 - Trade like a girl
Chapter 2 - Mental Accounting, Emotional Hierarchies, and Behavioral Heuristics
§ 2.1 - Keeping emotional score
§ 2.2 - Maslowian portfolio theory
§ 2.3 - "Shots at greatness" Rehabilitating self-actualization in neo-Maslowian thought as a trading strategy
§ 2.4 - Behavioral environmental economics
§ 2.5 - Fables of the reconstruction
Chapter 3 - Higher-Moment Capital Asset Pricing and Its Behavioral Implications
§ 3.1 - The conventional capital asset pricing model
§ 3.2 - Four-moment CAPM as a Taylor series expansion
§ 3.3 - A bridge between econometric and behavioral views of low volatility
Chapter 4 - Tracking the Low-Volatility Anomaly Across Behavioral Space
§ 4.1 - The low-volatility anomaly and Bowman's paradox
§ 4.2 - Beta as a composite measure of volatility and correlation
§ 4.3 - Downside volatility and correlation tightening in emerging markets
§ 4.4 - Pricing and predicting correlation risk
§ 4.5 - Evidence against a correlation risk premium
Chapter 5 - The Intertemporal Capital Asset Pricing Model: Hedging Investment Risk Across Time
§ 5.1 - The intertemporal capital asset pricing model
§ 5.2 - Bad beta, good beta
§ 5.3 - Addressing the low-volatility anomaly through spatial and temporal bifurcations of beta
Chapter 6 - Risk Aversion
§ 6.1 - The Arrow-Pratt measures of risk aversion; the coefficient of absolute risk aversion
§ 6.2 - The coefficient of relative risk aversion § 6.3 - Pratt's risk-averse insurance premium
§ 6.4 - Hyperbolic absolute risk aversion
§ 6.5 - A comparison with scale-invariant models of financial returns
§ 6.6 - Risk aversion, risk tolerance, and their relationship to the Sharpe and kappa ratios
§ 6.7 - The Allais paradox § 6.8 - The St. Petersburg paradox
Chapter 7 - The Equity Risk Premium and the Equity Premium Puzzle §7.1 - The equity risk premium
§ 7.2 - A cautious stroll off Wall Street
§ 7.3 - The equity premium puzzle § 7.4 - Another puzzle, and a challenge
§ 7.5 - Habit formation and the life-cycle hypothesis
§ 7.6 - Catching up with the Joneses
§ 7.7 - Macroeconomic disaster and personal peril
§ 7.8 - Familiarity breeds irrationality
§ 7.9 - Gaudeamus igitur: The familiar but curious economics of university endowments
Chapter 8 - Prospect Theory § 8.1 - Comprehensive accounts of behavioral finance
§ 8.2 - Responding to anomalies in expected utility theory
§ 8.3 - The value function
§ 8.4 - Flagging prospect theory: Log-logistic distribution
§ 8.5 - Flagging prospect theory: Two-parameter lognormal distribution § 8.6 - Cumulative prospect theory
§ 8.7 - The weighting function
§ 8.8 - The fourfold pattern
Chapter 9 - Specific Applications of Prospect Theory to Behavioral Finance
§ 9.1 - The longing for lotteries
§ 9.2 - Initial public offerings
§ 9.3 - Prospect theory and Bowman's paradox
§ 9.4 - Prospect theory and the equity premium puzzle: Myopic loss aversion
§ 9.5 - Another equ
About the Author: James Ming Chen holds the Justin Smith Morrill Chair in Law at Michigan State University, USA. He teaches, lectures, and writes widely on law, economics, and regulation. His books, Disaster Law and Policy and Postmodern Portfolio Theory, cover a broad range of issues concerning extreme events and risk management, from natural to financial disasters. He is of counsel to the Technology Law Group of Washington, D.C.; a public member of the Administrative Conference of the United States; and an elected member of the American Law Institute. A magna cum laude graduate of Harvard Law School and a former editor of the Harvard Law Review, Chen also served as a clerk to Justice Clarence Thomas of the Supreme Court of the United States.
