| Summary: | 碩士 === 國立政治大學 === 國際經營與貿易研究所 === 97 === I used to be a securities specialist, serving in Taishin Holdings during January 2007-October 2008. As a securities specialist, I found financial markets so fascinating. Among all the financial markets, stock market seems to be the most eye-catching spot, because of its low transaction costs, a large number of participants, instant communication. If there is any place where the theory of perfect competition ought to be translated into practice, it is the stock market.
When it comes to real word, traditional pricing model seems to be irrelevant. What is the real driving force behind stock market? Is it only simply the discount of dividends regardless of acquisition, future prospect or the credit of leading staff? I would like to discuss the issue under the foundations of behavioral finance which is different from those of tradition market theory.
In this article, I shall start with briefly introducing Behavioral Finance and its psychological foundations in Chapter 2. In Chapter 3, a review to Gordon Model. In chapter 4, I will start with confirmation bias as the entry point creating a new boom/bust model with Reflexivity. In chapter 5, I shall illustrate a case and discuss the advantage and also the flaw of the model.
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