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The 4th workshop on behavioral economics November 26, 2005 Kazuhiko OHASHI Graduate School of International Corporate Strategy Hitotsubashi University
Behavioral Finance:
Effects of psychology on financial behavior Capital markets: Asset pricing Investment behavior
Corporate Finance:
Corporate managers vs investors Financial contracting and real investment
Two approaches:
Investors Managers Irrational Rational Rational Irrational
Market Timing
Mispricing by Irrational investors Managers act for share holders Issue equity when over-valued Capital structure M&A
3Policy implication:
Social cost of behavioral distortion? Economic policy under irrationality? Can we treat two approaches jointly?
Miscellanea:
Japanese Keiretsu and the Bubble Insulation from short-term market pressure? Need mechanism of corporate governance other than capital market?