What contribution has behavioural finance make to the explaination of Essay

What contribution has behavioural finance make to the explaination of stock markets bubbles and crashes - Essay Example Human behaviour and personal investment decision making can influence the trading results of a stock market and therefore, it is relevant to discuss the role of behavioural finance in the investment decisions at stock market. With this background, this paper attempts to discuss the influence of behavioural finance on the stock market performance in general and on the market bubbles and crashes in particular. The essay takes a descriptive approach wherein the present literature on these issues is mainly covered and an attempt is made to incorporate the relevant theories of behavioural finance. Behavioural finance is one of the fast developing areas in the field of financial literature. This field of knowledge has developed a number of theories and theoretical models to explain the behavioural aspects of investment decision making. Most of the theories and models have been developed by borrowing insights from other branches such as psychology, sociology, and other behavioural sciences to analyze the behavioural aspects of investors and its influence on stock market performance. A good number of studies have been undertaken across the world to evolve behavioural theories and models so as to explain the association between the investor psychology and stock market performance. This area of knowledge tries to answer the influence of individual and collective behaviour exhibited by investors on the market prices. The rational finance which stems from neoclassical economics postulates that the economic decisions of investors are determined by the principles of perfect self-inter est, perfect rationality, and perfect information (Ware2000). This is not going to be a logical view point as described by behavioural finance. Behavioural finance states that people are neither perfectly rational nor perfectly irrational; they possess diverse combinations of rational

Conducting e-Business Essay Example | Topics and Well Written Essays - 1500 words

Conducting e-Business - Essay Example Challenges faced by start-up businesses wanting to make the best use of the Internet are first to know why they should take up the e-business route, to know what options are available, and then know in more detail how to go about the whole process of setting up and running the system. All companies under the capitalist system seek competitive advantage over their competition. Therefore, minimizing costs and maximizing profits are the higher priorities. Greater challenges faced by those start-up businesses wanting to use the Internet as its core medium of operation through the deployment of a data-centric service or product: Effective integration of business processes so that the e-business solution is capable of delivering reliable and accurate product/service information online in real time. The company should be able to react quickly to take on new opportunities and reduce costs and time to market their products/services. Additional modules of the e-business system should be flexible, meet industry standards, and allow new implementations to be added easily and quickly, and with minimal disruption. The system must be able to handle the different computing systems across all the company’s offices and departments. Security issues dealing with authorization and access to the system both internally and on the Internet. Seamless integration of internal database with Internet system. Implementation of feedback loops to tailor service based on individual decisions and requirements. This requires faster data analysis tools and greater integration.