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Podcast: Syndication Law & The Private Placement Memorandum Attorney
Episode: Behavioral Finance for Syndicators and Fund Managers Part 1: Cognitive Biases and Emotional Biases
Description: Ever wondered why sometimes people make irrational financial decisions? Welcome to the world of behavioral finance, a concept that emerged in the 1990s. Traditionally, the world of finance was seen as a rational decision-making process, where individuals made calculated choices based on available information, leading to efficient markets. But then, anomalies started appearing. People were seen paying exorbitant prices for assets, or holding onto investments long after they should have sold them, baffling the orthodox financial model. Enter behavioral finance, which accepts that individuals sometimes behave irrationally, influenced by psychological factors. There are two types of biases we have...