Nicholas Barberis

Nicholas Barberis is a professor of finance at Yale School of Management who has built a reputation as one of the leading theoretical contributors to behavioral finance. His research applies psychological insights — particularly from Kahneman and Tversky's prospect theory — to formal models of investor behavior and asset pricing. His paper on "A Model of Investor Sentiment" (with Shleifer and Vishny) showed how investor overreaction and underreaction to earnings can produce the patterns of momentum and value returns documented empirically. He has also developed models based on the concept of "extrapolation" — investors projecting recent trends too far into the future. His textbook contributions and survey papers on behavioral finance have made the field accessible to both academic and practitioner audiences.