Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/28954 
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dc.contributor.authorTuckett, Daviden
dc.date.accessioned2009-12-07-
dc.date.accessioned2009-12-08T15:27:58Z-
dc.date.available2009-12-08T15:27:58Z-
dc.date.issued2009-
dc.identifier.citation|aEconomics: The Open-Access, Open-Assessment E-Journal|c1864-6042|v3|h2009-40|nKiel Institute for the World Economy (IfW)|lKiel|y2009|p1-22en
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2009-40en
dc.identifier.urihttp://hdl.handle.net/10419/28954-
dc.description.abstractThe author suggests that the 2008 financial crisis was the culmination of an accelerating and inherently unstable process of financial market evolution. He argues that markets are not well organized to manage the power that financial assets have to generate emotion and their wider effect on human imagination and judgement, anchored in neurobiology. Judgements and decisions about risk, reward and the evaluation of success can become systematically compromised because the excitement of potential gain is disconnected from anxiety about potential consequences, producing groupthink and bubbles. When anxiety breaks through, a catastrophic loss of confidence is inevitable. In the aftermath the emotional pain that would be involved in accepting responsibility stands in the way of lessons being learned. The author's theoretical framework is influenced by modern psychoanalysis and draws on an interview study of international fund managers in 2007. He suggests that underlying psychological conflicts have influenced the way market institutions have evolved to compete by selling the promise of exceptional performance. To cope with the expectations upon them, agents are impelled to base their actions on stories which overvalue opportunities and underestimate risks; this creates agency issues and facilitates the process of disconnecting anxiety from excitement that creates bubble potential. Policy implications go well beyond improving regulation and transparency.en
dc.language.isoengen
dc.publisher|aKiel Institute for the World Economy (IfW) |cKielen
dc.subject.jelG01en
dc.subject.jelG18en
dc.subject.jelG28en
dc.subject.ddc330en
dc.subject.keywordFinancial bubblesen
dc.subject.keywordfinancial crisesen
dc.subject.keywordgroup functioningen
dc.subject.keywordgroupthinken
dc.subject.keywordmarket instabilityen
dc.subject.keywordfinancial regulationen
dc.subject.keywordpsychoanalysisen
dc.subject.keywordpsychologyen
dc.subject.stwFinanzmarktkriseen
dc.subject.stwAnlageverhaltenen
dc.subject.stwFinanzmarkten
dc.subject.stwBubblesen
dc.subject.stwSozialpsychologieen
dc.subject.stwErwartungstheorieen
dc.subject.stwRegulierungen
dc.subject.stwWelten
dc.titleAddressing the psychology of financial markets-
dc.typeArticleen
dc.identifier.ppn614388287en
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.enen
dc.identifier.repecRePEc:zbw:ifweej:200940en
econstor.citation.journaltitleEconomics: The Open-Access, Open-Assessment E-Journalen
econstor.citation.issn1864-6042en
econstor.citation.volume3en
econstor.citation.issue2009-40en
econstor.citation.publisherKiel Institute for the World Economy (IfW)en
econstor.citation.publisherplaceKielen
econstor.citation.year2009en
econstor.citation.startpage1en
econstor.citation.endpage22en

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