Introduction
The book “Greed and Fear” is a very powerful account of the impacts of psychology on economics. This book takes an insight overview of the investor irrationalities and its effects on the market prices and returns. The author gives an account of how the effects contradict the efficient market hypothesis. According to the author, the phrase “hope and fear” gives a better description of the reactions and the behavior of different market players. From the book it can be established that all financial practitioners eventually let bias, overconfidence and emotion influence their judgment and actions. The author uses ...