Tag Archives: delayed gratification

Game Theory, Behavioral Finance, and Investing: Part 4 of 5

In earlier installments of this article, I have discussed some behavioral biases that tend to influence people to make bad investing decisions.  In this post, I explore several more of these biases.  The focus of this piece is on how we perceive ourselves and our ability to make independent decisions.  One of the key ideas within rational markets is that people gather public information and make informed decisions.  Without rational market participants, it is unlikely that markets themselves will converge to appropriate prices for traded assets (stocks, bonds, real estate, etc.).  Continue reading