(consumer psychology and behavior on financial...

金融科技FinTech:FinancialTechnology

1

1052FinTech06MISEMBA(M2263)(8595)

Fri,12,13,14(19:20-22:10)(D409)

金融服務消費者心理與行為(ConsumerPsychologyandBehavior

onFinancialServices)

Min-Yuh Day戴敏育

Assistant Professor專任助理教授

Dept. of Information Management, Tamkang University淡江大學資訊管理學系

http://mail. tku.edu.tw/myday/2017-03-31

TamkangUniversity

週次 (Week)日期 (Date)內容 (Subject/Topics)12017/02/17Fintech金融科技課程介紹

(CourseOrientationforFintech:FinancialTechnology)22017/02/24Fintech金融科技的演進：貨幣與金融服務

(EvolutionofFintech:MoneyandFinancialServices)32017/03/03Fintech金融科技：金融服務科技創新

(Fintech:TechnologyInnovationinFinancialServices)42017/03/10Fintech金融科技與金融服務價值鏈

(FintechandFinancialServicesValueChain)52017/03/17Fintech金融科技商業模式創新

(FintechBusinessModelsInnovation)62017/03/24Fintech金融科技個案研究 I

(CaseStudyonFintech I)

課程大綱 (Syllabus)

2

週次 (Week)日期 (Date)內容 (Subject/Topics)72017/03/31金融服務消費者心理與行為

(ConsumerPsychologyandBehavioronFinancialServices)

82017/04/07教學行政觀摩日 (Off-campusstudy)92017/04/14區塊鏈技術

(Blockchain Technology)[InvitedSpeaker:Dr.Raymund Lin,IBM(林俊叡博士，IBM)]

102017/04/21期中報告 (MidtermProjectReport)112017/04/28PythonPandas財務大數據分析

(FinanceBigDataAnalyticswithPandasinPython)122017/05/05人工智慧與深度學習金融科技

(ArtificialIntelligenceandDeepLearningforFintech)


3

週次 (Week)日期 (Date)內容 (Subject/Topics)132017/05/12Fintech金融科技個案研究 II

(CaseStudyonFintechII)142017/05/19金融科技財富管理：機器人理財顧問

(Robo-AdvisorsforWealthManagementinFintech)152017/05/26投資組合最佳化與程式交易

(PortfolioOptimizationandAlgorithmicTrading)162017/06/02金融科技智慧問答系統

(IntelligentQuestionAnsweringSystemforFintech)172017/06/09期末報告 I(FinalProjectPresentationI)182017/06/16期末報告 II(FinalProjectPresentationII)


4

ConsumerPsychologyand

Behavioron

FinancialServices5

ConsumerPsychology

andBehavior

6

Howconsumersthink,feel,andact

7Source:PhilipKotler &KevinLaneKeller,MarketingManagement,14thed.,Pearson,2012

Fintech:TechnologyInnovationin

FinancialServices8

FintechImpactonConsumerBehavior

9Source: http://bitcoinist.com/fintech-impact-consumer-behavior-mobile-payments/

BehavioralFinance

10

Hersh Shefrin (2007),BeyondGreedandFear:

UnderstandingBehavioralFinanceandthePsychologyofInvesting,OxfordUniversityPress

11Source: https://www.amazon.com/Beyond-Greed-Fear-Understanding-Association/dp/0195304217

AndreiShleifer(2000),InefficientMarkets:AnIntroductiontoBehavioralFinance,

OxfordUniversityPress

12Source: https://www.amazon.com/Inefficient-Markets-Introduction-Behavioral-Clarendon/dp/0198292279

LucyAckert andRichardDeaves (2009),BehavioralFinance:Psychology,Decision-Making,andMarkets,

South-WesternCollegePub

13Source: https://www.amazon.com/Behavioral-Finance-Psychology-Decision-Making-Markets/dp/0324661177

EdwinBurtonandSunit N.Shah(2013)BehavioralFinance:UnderstandingtheSocial,Cognitive,and

EconomicDebates,Wiley

14Source: https://www.amazon.com/Behavioral-Finance-Understanding-Cognitive-Economic/dp/111830019X

H.KentBakerandVictorRicciardi (2014)InvestorBehavior:ThePsychologyofFinancialPlanningand

Investing,Wiley

15Source: https://www.amazon.com/Investor-Behavior-Psychology-Financial-Investing/dp/1118492986

Marketing

“Meetingneeds

profitably”16Source:PhilipKotler &KevinLaneKeller,MarketingManagement,14thed.,Pearson,2012

Valuethesumofthetangibleandintangible

benefitsandcosts17Source:PhilipKotler &KevinLaneKeller,MarketingManagement,14thed.,Pearson,2012

Value

18

Totalcustomer

benefitCustomerperceived

valueTotal

customer

cost

Source:PhilipKotler &KevinLaneKeller,MarketingManagement,14thed.,Pearson,2012

CustomerPerceivedValue

19

Productbenefit

Servicesbenefit

Personnelbenefit

Imagebenefit

Totalcustomer

benefitCustomerperceived

valueTotal

customer

cost

Monetarycost

Timecost

Energycost

Psychologicalcost


ModelofConsumerBehavior

20

MarketingStimuli

OtherStimuli

• Products&Services

• Price• Distribution• Communications

• Economic• Technological• Political• Cultural

Psychology

• Motivation• Perception• Learning• Memory

ConsumerCharacteristics

• Cultural• Social• Personal

BuyingDecisionProcess

PurchaseDecision

• ProblemRecognition

• InformationSearch

• EvaluationofAlternatives

• Purchasedecision

• Post-purchasebehavior

• Productchoice• Brandchoice• Dealerchoice• Purchaseamount• Purchasetiming• Paymentmethod


BuildingCustomerValue,Satisfaction,

andLoyalty

21Source:PhilipKotler &KevinLaneKeller,MarketingManagement,14thed.,Pearson,2012

CustomerPerceivedValue,CustomerSatisfaction,andLoyalty

22

CustomerPerceived

Performance

CustomerExpectations

CustomerPerceivedValue

CustomerSatisfaction

CustomerLoyalty


TheoryofReasonedAction(TRA)

23Source: Fishbein, M., & Ajzen, I. (1975). Belief, Attitude, Intention, and Behavior: An Introduction to Theory

and Research. Reading, MA: Addison-Wesley.

TRA(1975)

Source: Fishbein, M., & Ajzen, I. (1975). Belief, Attitude, Intention, and Behavior: An Introduction to Theory and Research. Reading, MA: Addison-Wesley. 24

TRA(1989)

Davis,F.D.,R.P.Bagozzi and P.R.Warshaw,“User acceptance of computer technology : A comparison of two theoretical models ”,Management Science,35(8),August 1989,pp.982-1003 25

TheoryofPlannedBehavior(TPB)

26Source: Ajzen, I., (1985) “From Intentions to Actions: A Theory of Planned Behavior,” in J. Kuhl and J. Beckmann

(Eds.) Action Control: From Cognition to behavior, Springer Verlag, New york, 1985, pp.11-39.

TPB(1985)

Ajzen, I., (1985) “From Intentions to Actions: A Theory of Planned Behavior,” in J. Kuhl and J. Beckmann (Eds.) Action Control: From Cognition to behavior, Springer Verlag, New york, 1985, pp.11-39. 27

TPB(1989)

Ajzen, I., (1989) “Attitude Structure and Behavior,” in A. R. Pratkanis, S. J. Breckler, and A. G. Greenwald(Eds.), Attitude Structure and Function, Lawrence Erlbaum Associates, Hillsdale, NJ, 1989, pp.241-274. 28

TPB(1991)

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179-211. 29

http://www.people.umass.edu/aizen/index.html 30

TechnologyAcceptance

Model(TAM)

31Source: Davis,F.D.,R.P.Bagozzi and P.R.Warshaw,“User acceptance of computer technology : A comparison of two theoretical models ”,Management Science,35(8),August 1989,pp.982-1003

TAM(1989)

Davis,F.D.,R.P.Bagozzi and P.R.Warshaw,“User acceptance of computer technology : A comparison of two theoretical models ”,Management Science,35(8),August 1989,pp.982-1003 32

TAM2(2000)

Venkatesh, V., & Davis, F. D. (2000) “A theoretical extension of the technology acceptance model: Four longitudinal field studies”, Management Science, 46(2), pp. 186-204. 33

BehavioralFinance

34

RationalBehavior

IrrationalBehavior

35

Emotion

Sentiment

36

ModernFinancialResearch

• TheoreticalFinance– studyoflogicalrelationshipsamongassets.

• EmpiricalFinance– studyofdata inordertoinferrelationships.

• BehavioralFinance– integratespsychology intotheinvestmentprocess.

37Source: Robert A. Strong (2004), Practical Investment Management, South-Western

PsychologyinBehaviorFinance

• Beliefs• Preferences

–Prospecttheory–Ambiguityaversion

38Source: Barberis, Nicholas, and Richard Thaler. "A survey of behavioral finance." Handbook of the Economics of Finance 1 (2003): 1053-1128.

BehavioralFinanceThemes

• Heuristic-DrivenBias• FramingDependence• InefficientMarkets

39Source: Hersh Shefrin (2007), “Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing”, Oxford University Press.

EfficientMarket

Hypothesis(EMH)

40Source: Hersh Shefrin (2007), “Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing”, Oxford University Press.

ExpectedUtilityTheory(EUT)

41Source: Kahneman, Daniel, and Amos Tversky. "Prospect theory: An analysis of decision under risk."

Econometrica: Journal of the econometric society (1979): 263-291.

Prospecttheory:Ananalysisofdecisionunder

risk42

Source: Kahneman, Daniel, and Amos Tversky. "Prospect theory: An analysis of decision under risk."Econometrica: Journal of the econometric society (1979): 263-291.

ProspectTheory(Kahneman andTversky,1979)

43Source: v.

DecisionMakingunderRisk



Whichofthefollowingwouldyouprefer?

• A:–50%chancetowin1,000,–50%chancetowinnothing;

• B:–450forsure.



Decision



ExpectedUtility



Decision



PreferencesBetweenPositiveandNegativeProspects



Certainty,Probability,

andPossibility



ProspecttheoryValueFunction



ProspecttheoryWeightingFunction



Problem4asadecisiontree(standardformulation)



Problem10asadecisiontree(sequentialformulation)



Decision



Prospecttheory

• Peopleunderweightoutcomesthataremerelyprobableincomparisonwithoutcomesthatareobtainedwithcertainty.– Thistendency,calledthecertaintyeffect,contributestoriskaversioninchoicesinvolvingsuregainsandtoriskseekinginchoicesinvolvingsurelosses.



Prospecttheory

• Peoplegenerallydiscardcomponentsthataresharedbyallprospectsunderconsideration.– Thistendency,calledtheisolationeffect,leadstoinconsistentpreferenceswhenthesamechoiceispresentedindifferentform.



Prospecttheory

• Value isassignedtogainsandlossesratherthantofinalassetsandinwhichprobabilitiesarereplacedbydecisionweights.

• Thevaluefunctionisnormallyconcaveforgains,commonlyconvexforlosses,andisgenerallysteeperforlossesthanforgains.



• Decisionweightsaregenerallylower thanthecorrespondingprobabilities,exceptintherangeoflowprobabilities.

• Overweighting oflowprobabilitiesmaycontributetotheattractivenessofbothinsuranceandgambling.

70

Prospecttheory

Source: Kahneman, Daniel, and Amos Tversky. "Prospect theory: An analysis of decision under risk."Econometrica: Journal of the econometric society (1979): 263-291.

BehavioralHeuristicsandBiases

inDecisionMaking

71

BehavioralFinanceAnomalies

• TheRationalMan– ConsumerChoicewithCertainty– ConsumerChoicewithUncertainty– TheAllaisParadox

72Source: Edwin Burton and Sunit N. Shah (2013), “Behavioral Finance: Understanding the Social, Cognitive, and Economic Debates”, Wiley.

ProspectTheory

• TheReferencePoint• TheS-Curve• LossAversion


• PerceptionBiases• InertialEffects• CausalityandStatistics• Illusions


BehavioralFinanceAnomalies

• Saliency• Framing• Anchoring• SunkCostBias


PerceptionBiases

• EndowmentEffect• StatusQuoEffect• DispositionEffect


InertialEffects

• Representativeness• ConjunctionFallacy• ReadingintoRandomness• SmallSampleBias• ProbabilityNeglect


CausalityandStatistics

• IllusionofTalent• IllusionofSkill• IllusionofSuperiority• IllusionofValidity


Illusions

BehavioralFinance:TwoMajorFoundations

• InvestorSentiment– createsdisturbancestoefficientprices.

• Limitedarbitrage– arbitrageisneverriskfree,henceitdoesnotcounterirrationaldisturbances.

• Pricesmaynotreacttoinformationbythe“right”amount.• Pricesmayreacttonon-information.• Marketsmayremainefficient.

79

Arbitrage

80Source: http://www.beliefnet.com/columnists/moviemom/2012/09/interview-nicholas-jarecki-of-arbitrage.html

81

Arbitrage

$100

$120Gain $20

Buy Low in Market A

Sell High in Market B

Heuristics• Overconfidence

– peopleoverestimatethereliabilityoftheirknowledge.

• Excessivetrading• FramingEffect

82

Heuristics• RegretAversion

– anticipationofafutureregretcaninfluencecurrentdecision.

• DispositionEffect– sellwinners,holdontothelosers.

• Anchoringandadjustment:cancreateunder-reaction.

83

FashionsandFads

• Peopleareinfluencedbyeachother.Thereisasocialpressuretoconform.

• Herdingbehavior:“safety-in-numbers”.• InformationalCascades• PositiveFeedback• Example:excessivedemandforinternetIPOs.Extremelyhighopeningdayreturns.

84

SocialInfluences

• Socialnorms– Theinformalopinions,rules,andproceduresofagroup.

– Yourpiersandsocialgroupsinfluenceyourinvestmentparticipation

• HerdingBehavior– Themovementintooroutofastockorindustryofcompaniesbylargegroupsofinvestors.

85

86Source: https://www.interaction-design.org/literature/article/confirmation-bias-it-s-not-what-we-think-we-know-that-counts

PsychologyofBeliefConfirmationBias

87

ConfirmationBias

Source: Robert A. Strong (2004), Practical Investment Management, South-Western

TheFacts

YourBeliefs

Overvalued

RepresentativenessHeuristic

88Source: Robert A. Strong (2004), Practical Investment Management, South-Western

A B

P (A & B) < P (A) or P (B)

A & B

HerdingBehavior

• Herdingreferstothelemming-likebehaviorofinvestorsandanalystslookingaround,seeingwhateachotherisdoing,andheadinginthatdirection.

• Theremaynothavebeensafetyinnumbers,butthereprobablywassomecomfortinthem.

89Source: Robert A. Strong (2004), Practical Investment Management, South-Western v

90Source: Van Raaij, W. Fred. "Economic psychology." Journal of Economic Psychology 1, no. 1 (1981): 1-24.

EconomicConditions

(E)

PersonalCharacteristics

(P)

EconomicBehavior(B)

Katona’sEconomicPsychologyModel

References• PaoloSironi (2016),“FinTech Innovation:FromRobo-AdvisorstoGoalBased

InvestingandGamification”,Wiley.• SusanneChishtiandJanosBarberis (2016),“TheFINTECHBook:TheFinancial

TechnologyHandbookforInvestors,EntrepreneursandVisionaries”,Wiley.• LucyAckert andRichardDeaves (2009),“BehavioralFinance:Psychology,

Decision-Making,andMarkets”,South-WesternCollegePub.• Hersh Shefrin (2007),“BeyondGreedandFear:UnderstandingBehavioral

FinanceandthePsychologyofInvesting”,OxfordUniversityPress.• EdwinBurtonandSunit N.Shah(2013),“BehavioralFinance:Understanding

theSocial,Cognitive,andEconomicDebates”,Wiley.• DanielKahneman andAmosTversky (1979),"Prospecttheory:Ananalysisof

decisionunderrisk." Econometrica:Journaloftheeconometricsociety (1979):263-291.

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