Behavioral Risk Management: Managing the Psychology That Drives Decisions and Influences Operational Risk - Hardcover

'Behavioral Risk Management is an accessible, insightful, and necessary work for anyone who is involved in the pursuit of value creation. Hersh Shefrin has managed to combine an examination of the research into the psychology of risk with specific applications and examples of its impact on real life situations. Like Luca Celati's The Dark Side of Risk Management, Shefrin's work brings important issues to the forefront that are unknown to most risk managers. Knowledge of the influence of psychology on behavior and risk enhances opportunities, while there may be unexpected peril for those who ignore these insights. This is book is essential reading.' ―David R. Koenig, Founding Principal, The Governance Fund

'This book provides a complete understanding of why behavioral components have to be included in risk management. Either from a micro, a macro, or a regulation perspective, quants and rationality have revealed their limits. Drawing from the major disasters, Shefrin provides a thorough analysis of the psychological components which led to such outcomes. Without any overconfidence bias, this is a must-read for anyone involved in operational risk management.' ―Catherine Lubochinsky, Professor, University of Paris II

'Behavioral finance offers many useful lessons for risk managers that have not been fully embraced by the profession yet. This book provides a comprehensive and accessible presentation of behavioral finance and then highlights these concepts in multiple case studies provided from the risk management failures of the recent past. Risk managers can use this book to extend their toolkits beyond the typical quantitative measures of risk by considering the impact, and shortcomings, of human psychology.' ―Chris Donohue, Global Association of Risk Professionals

"Professor Shefrin demonstrates how fundamental psychological factors influence risk-taking decisions and affect investment returns, corporate performance, and societal wealth creation. Shefrin's findings are informed by a dedicated research effort stretching over a decade. Showing the importance of subtle human traits, this seminal book is a must for students and scholars in finance, economics, and management as well as executives, policy makers, and regulators." ―Torben Juul Andersen, Professor of International Management and Strategy, Copenhagen Business School

"This book explains the key role of psychology in risk management. All risk managers and students of risk management will find the book's insights indispensable." ―John Hull, Maple Financial Professor of Derivatives and Risk Management, Joseph L. Rotman School of Management, University of Toronto