La prospect theory e i recenti sviluppi della behavioral finance

This paper surveys the basic issues concerning the influence of prospect theory on the birth and development of behavioral finance. It is illustrated how financial modelling has progressively shifted from the analysis of rational agents to noise traders first and biased traders later. Models discussing investors endowed with a cognitive bias are examined in closer detail, with specific regard to those models whose set up is derived from the more recent developments in modern decision theory. The last section of the paper argues that it is generally unrecognised that Keynes’s treatment of decision under uncertainty in his Treatise on Probability contains the seeds of most modern developments.