Standard models of financial markets assume people behave rationally. Behavioral finance builds on this foundation by taking insights from cognitive psychology (e.g. overconfidence) to explain puzzling observations in asset prices that cannot be explained by reason. In this talk, Professor Utpal Bhattacharya from Department of Finance will give three examples from his research on behavioral finance: superstitious traders in Taiwan, haunted houses in Hong Kong, and left-digit fixated traders in the United States.
He will conclude the talk with glimpses of his latest research. Titled “Unholy Trinity”, it explores, in the context of HK, the exploitation of behavioral traders by two types of rational traders that use AI.
Professor Utpal Bhattacharya is a Chair Professor at HKUST. His research is about the dark side of financial markets. He believes, with apologies to Thomas Jefferson, that "the price of capitalism is eternal vigilance."
His research has been featured in full-length stories more than a hundred times in various media across the world, including six times in the Economist. He wrote a satire about the legendary fraudster Madoff in the New York Times. He has been invited to present his research in more than 250 institutions in 38 countries in 5 continents. He wrote a report for and served as a member of the "Task Force to Modernize Securities Regulation in Canada" in 2006.e and his report were featured in a Canadian Broadcasting Corporation investigative story titled "Who Is Guarding Your Money" on November 23, 2008. On December 2, 2008, legislators in Ontario, Canada, discussed this report. On May 16, 2012, the Securities and Exchange Commission of the U.S. invited him to present the findings of his Journal of Finance paper that documents cross-subsidies in mutual fund families. He is now an official whistleblower.
Prof. Bhattacharya teaches in a different country or region every summer. He has taught at top universities in Argentina, Australia, Brazil, Canada, China, Colombia, Finland, France, Germany, India, Indonesia, Ireland, Italy, Japan, Kazakhstan, Latvia, Lithuania, Mexico, Netherlands, New Zealand, Portugal, Romania, Russia, Singapore, Slovenia, South Korea, Taiwan, Turkey, U.K., U.S.A. (Chicago, Duke and MIT) and Vietnam.
His goal is to spread the gospel of honest finance to every corner of the globe.
Host: Prof Dong ZHANG, Associate Professor, Division of Social Science, HKUST