Hersh Shefrin : Fear during financial crisis : KPCC-FM
Hersh Shefrin, Mario L. Belotti Professor of Finance, was interviewed for a story that ran on KPCC-FM on why humans feel fear during times of financial crisis. Professor Shefrin is one of the pioneers in the behavioral finance and economics. He argues that our innate need to survive and our predisposition to find evidence that supports our beliefs causes us to react quickly to threats, including financial threats.
“Panics effectivlely combine fight or flight reactions with crowd psychology,” said Professor Shefrin. “Those panics are in some sense problematic, but in some sense if we didn't have them. The alternative could be worse if we sat around and let the threat loomed and didn’t react quickly enough.”
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