Joseph E. Stiglitz, a 2001 Nobel laureate, addressed the annual meeting of the Academy of Behavioral Finance and Economics at the Polytechnic Institute of NYU last week.
The Academy was founded five years ago to provide a forum dedicated to the exchange of research findings and professional advancement in the field of behavioral finance and economics. The 2012 annual meeting attracted more than 200 researchers and practitioners from all around the globe, who made a total of 100 presentations on their most recent research.
“We are very happy with it,” said Russell Yazdipour, conference co-chair and professor of finance at California State University. “The arrangement has grown each year and is an important forum for researchers in this field to exchange ideas.”
Philip Z. Maymin, assistant professor of finance and risk engineering at NYU-Poly, echoed his colleague’s words.
“This is my favorite conference of the year. Given that the field is so young, it’s embodied by a sense of pioneering that you don’t get in traditional finance,” Maymin said. “Instead of competing, researchers help and support each other.”
Behavioral finance dates back no more than 30 years. Contrary to traditional finance, which is heavily reliant on mathematical models and static assumptions regarding investor rationality and availability of information, the behavioral field emphasizes cognitive psychology and how investors make decisions. Its fundamental assumptions are that all investors are emotional human beings who sometimes make irrational decisions, and not all investors have equal access to information.
During his addres, Stiglitz discussed the topic of reforming finance and economics in the wake of the global financial crisis. The remaining 100 presentations covered topics ranging from information diffusion in the stock market to the correlation between work performance and marital status of American chief executive officers.
“A lot of the topics introduced at this meeting touch on things that directly affect the choices made by individual investors,” said Gregg Fisher, founder and president of investment management firm Gerstein Fisher, after finishing his presentation on the impact of large events, such as the dot-com bubble on investor decisions.
Fisher, who is also an adjunct professor of finance at NYU-Poly, praised the academy’s choice to arrange the conference at the Brooklyn campus-—home to one of the world’s leading financial engineering programs.
Computer science major senior Robert Godlewski was pleased to gain a new outlook on a traditional field through the academy’s presentations.
“I’m interested in getting a master in financial engineering, so getting a fresh perspective on finance, financial engineering and economics is helpful,” Godlewski said.
A version of this article appeared in the Sept. 24 print edition. Anders Melin is a contributing writer. Email her at [email protected].
