Mark Fenton-O’Creevy – Traders. Risks, Decisions And Management In Financial Markets

MARK FENTON-O’CREEVY – TRADERS. RISKS, DECISIONS AND MANAGEMENT IN FINANCIAL MARKETS

This is a book about traders in financial markets, what they do, the kind of people they are, how they perceive the world, how they make decisions and take risks. This is a book about how traders are managed, the best and the worst examples, and about the institutions they occupy: firms, markets, cultures, and theories of how the world works. How these institutions function, how traders are managed, and how traders view the world all have profound effects on the financial environment. The book explores the implications of these relationships. A three-year project researching the psychological and social influences on the behavior and performance of traders in investment banks is the basis of the data discussed in this book. There were 118 traders and managers in the group. A novel computer based measure designed to assess illusion of control and other cognitive biases was used to collect data. The authors approach to writing is different. Sociology, psychology and economics are used to illuminate the work of traders. The insights of neo-classical financial economics need to be supplemented with a broader range of social science approaches if we are to effectively understand financial markets. To researchers interested in the functioning of financial institutions and markets, to those with an interest in market regulation, and to practitioners wishing to benefit from an analytical perspective on the challenges facing traders and their managers, the book will be of value.