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Sudden crashes are common features of financial markets, worldwide. Those sudden crashes cannot be explained by current economic theories, which essentially rely on changes in fundamentals. Psychological factors are a natural alternative explanation to those phenomena. In this book, we investigate those psychological factors and their impact on financial crises, with a strong focus on collective rationality. Concepts such as herd behavior and pack behavior are studied, together with their implications for financial stability.

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Pr. Patrick Leoni is a Professor of Finance at Kedge Business School, an elite business school in France. He received his Ph.D. in Economics from the University of Minnesota in 2003, and he has earned several awards for his research and teaching.

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