ISSN: 1428-278X
OAI
DOI: 10.18276/er.2017.30-05
Issue archive /
t. 30 2017
Banking sector and behavioral finance
| Authors: |
Ekrem
Tufan
assoc. prof. dr. (PHD), Canakkale Onsekiz Mart University, Faculty of Tourism |
| Keywords: | weird bias and loss aversion reference dependence sunk cost heuristics biases banking sector Behavioral Finance |
| Whole issue publication date: | 2017 |
| Page range: | 10 (67-76) |
Abstract
Human is not rational but normal. This is the main discrepancy between Traditional
and Behavioral Finance theories. Behavioral Finance postulates that humans
have heuristics and biases when making judgments under uncertainty, and it is perfectly
normal, whilst Traditional Finance accepts human as rational. The service sector, including
banking, is more human oriented than others. Human (customer) makes banking-
related decisions every day under uncertain conditions. So there should be some
heuristics and biases. In this study we have discussed the possibilities over the biases in
banking sector, such as sunk cost, reference dependence and the loss aversion.
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