Behavioural Finance

Jönköping International Business School
Jönköping University

B eh avioral F i nance
Investors’ Rationality

Bachelor Thesis within Finance
Authors:
Bernéus, Hannes
Sandberg, Carl
Wahlbeck, David
Tutor:
Jönköping

Österlund, Urban
December, 2008

Acknowledgement
We would like to thank our tutor Mr. Urban Österlund for his support and guidance. We are also grateful for all valuable comments and insights from our fellow students during seminar sessions.
We would also like to present a special thanks to Johan Sandberg at Swedbank Robur and
Viktor Östebo at Nordnet. Without Mr. Sandberg’s and Mr. Östebo’s contribution, this thesis would not have been possible to complete.
To all the respondents: thank you for your participation!

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Hannes Bernéus

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Carl Sandberg

Jönköping International Business School
Date: 2008-12-11

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David Wahlbeck

Bachelor Thesis within Business Administration
Title:
Authors:
Tutor:
Date:
Subject terms:

Behavioral Finance – Investors’ Rationality.
Hannes Bernéus, Carl Sandberg, David Wahlbeck
Urban Österlund
2008-12-02
Behavioral Finance, Behavioral Economics, Finance, Economic
Psychology.

Abstract
Purpose:

The purpose of this thesis is to examine if professional investors are indicating tendencies of irrational behavior when exposed to certain psychological dilemmas related to the financial world.

Background:

A new field within financial theory emerged in the 1980s; one which did not build on fundamental cornerstones but from the world of psychology, called Behavioral Finance. The theories within Behavioral Finance also offered a new perspective when explaining market movements. The market is determined by people who can not always be considered rational in their investment decisions, especially not during times of financial distress (Shefrin, 2000).
Behavioral finance is, in essence, trying to explain and increase understanding of

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