Artificial Intelligence and Financial Behaviour

Edited by Riccardo Viale, Herbert Simon Society, BIB-Behavioral Insights Bicocca of University of Milan Bicocca and School of Government, LUISS, Rome, the late Shabnam Mousavi, formerly Center for Artificial Intelligence (CENTAI), Turin, Umberto Filotto, University of Rome “Tor Vergata” and Barbara Alemanni, University of Genoa, Italy

• Contents:Preface viiiIntroduction: Artificial intelligence should meet naturalstupidity. But it cannot! 1Riccardo VialePART I AI AND BOUNDED RATIONALITY1 Financial service providers, AI, satisficing, and the humantouch in the market for financial nudges and boosts 30Hersh Shefrin2 The importance of structural rationality: understandingmarket institutions 51Shyam Sunder3 Bits of individual knowledge in bytes of machines 69Shabnam Mousav and Mario Rasetti4 Radical rationality allows coping with fundamentaluncertainty on financial markets 89Paolo Sironi5 Integrating heuristics and learning in a computationalarchitecture for cognitive trading 111Remo Pareschi and Federico ZapponePART II AI AND MARKETS6 Artificial intelligence and conduct in wholesale markets 137Mark Yallop7 Using AI to assess credit risk; developing a model 144Umberto Filotto, Tommaso Giordani, Gian Paolo Stellaand Filmon Teclai8 Do we like robot? Consumers’ attitude towards the algorithm 156Barbara Alemanni9 Financial consumers, digital interfaces and decision aids 174Peter D. Lunn10 FOMO and Covid and Cryptos, oh my! 192Steven Jon Kaplan11 How AI is re-shaping the financial industry: lights, shadesand perspectives 205Paola Papanicolaou12 54,000 PRIIPs KIDs – how to read them (all) 215Adrien Amzallag13 Machine learning and artificial intelligence for risk management 240Edoardo FalettiIndex

‘This is an excellent book focusing on the adaptive features of heuristic financial decision making. This will be an excellent resource for all those interested in the financial markets such as investors, policy makers, researchers and university students.’