Behavioral Finance Symposium Summary Paper

May 6, 2018
Michael S. Barr, Annabel Jouard, Andrew Norwich, Josh Wright, Katy Davis

On September 14-15, 2017, the University of Michigan’s Center on Finance, Law, and Policy and behavioral science research and design lab ideas42 brought together influential leaders from academia, government, nonprofits, and the financial sector for a two-day symposium on behavioral finance. Behavioral finance is the study of how behavioral biases and tendencies affect financial decisions, and in turn how those impact financial markets. The summary paper is divided into two parts. Part I defines behavioral finance, explores how behaviorally minded economists and others seek to depart from assumptions that have traditionally played an important role in modeling human behavior, and discusses the underlying policy debate surrounding the use of “nudges.” Part II builds upon this understanding by analyzing consumers’ and small businesses’ financial well-being; the innovative “nudges” and experiments that were undertaken by symposium speakers and the organizations they represent; the limits, unintended consequences, and externalities that have arisen from innovation in behavioral finance; and the ways in which these small nudges have ripple effects throughout the entire financial system, affecting macroeconomic financial stability.

Recommended Citation

Barr, Michael S, co-author. "Behavioral Finance Symposium Summary Paper." Annabel Jouard, Andrew Norwich, Josh Wright, and Katy Davis, co-authors. Proceedings of the Behavioral Finance Symposium (2018): 1-38.