This book helps readers understand the widely documented distortion in the portfolio choice of
individual investors toward proximate firms - the proximity bias phenomenon. First it
recapitulates the fundamentals of modern portfolio theory. It then goes on to describe and
demonstrate different approaches on how to measure proximity bias and identifies and examines
potential motives and reasons for such a bias. In addition the book presents new analysis on
the financial effects of individual investors' proximity bias explaining and contributing with
possible policy implications on their portfolio distortion. This book will be of interest to
students and researchers as well as decision-makers in business firms and households.
