TY - JOUR
T1 - Perception of intentionality in investor attitudes towards financial risks
AU - Bossaerts, Peter
AU - Suzuki, Shinsuke
AU - O'Doherty, John P.
N1 - Funding Information:
The authors thank Carsten Murawski for several discussions about philosophy of mind and its relation to economic and scientific thinking, which helped shape this review; Carsten Murawski and Christo Karunanathan for comments on an earlier draft; and participants during presentations at the 2015 Auckland Finance Meetings (New Zealand), the 2016 Conference on Experimental Finance at Chapman University, the 2016 Australasian Meetings of The Econometric Society, the 2016 Tucson Meetings of the Society for Experimental Finance, at the University of Geneva, the University of New South Wales and at Macquarie University.
Publisher Copyright:
© 2018 The Authors
PY - 2019/9
Y1 - 2019/9
N2 - Traditionally, financial market participation has been treated as analogous to playing games of chance with a physical device such as roulette. Here, we propose that humans treat financial markets as intentional agents, with own beliefs and aspirations. As a result, the capacity to infer the intentions of others, Theory of Mind, explains behaviour. As evidence, we appeal to results from recent studies of: (i) forecasting in the presence of insiders, (ii) trading in markets with bubbles, and (iii) financial contagion. Intensity of, and skill in, Theory of Mind explains heterogeneity, not only in choices but also in neural activation.
AB - Traditionally, financial market participation has been treated as analogous to playing games of chance with a physical device such as roulette. Here, we propose that humans treat financial markets as intentional agents, with own beliefs and aspirations. As a result, the capacity to infer the intentions of others, Theory of Mind, explains behaviour. As evidence, we appeal to results from recent studies of: (i) forecasting in the presence of insiders, (ii) trading in markets with bubbles, and (iii) financial contagion. Intensity of, and skill in, Theory of Mind explains heterogeneity, not only in choices but also in neural activation.
KW - Experimental finance
KW - Financial risk perception
KW - Intentional stance
KW - Theory of Mind
KW - Trading skills
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U2 - 10.1016/j.jbef.2017.12.011
DO - 10.1016/j.jbef.2017.12.011
M3 - Article
AN - SCOPUS:85040693904
SN - 2214-6350
VL - 23
SP - 189
EP - 197
JO - Journal of Behavioral and Experimental Finance
JF - Journal of Behavioral and Experimental Finance
ER -