Behavioral Finance: An Introduction
43 Pages Posted: 18 Oct 2009 Last revised: 16 Dec 2011
Date Written: January 13, 2009
This survey introduces and reviews the field of behavioral finance. It outlines the traditional finance approach, which builds upon rational acting investors, its assumptions, and its shortcomings. Moreover, it surveys the main findings from psychology and sociology that contrast with this traditional finance approach, and it provides examples of situations and studies that reveal the relevance of these findings for financial markets and its participants.
Keywords: behavioral finance, investor psychology, investor behavior, financial markets, market efficiency, individual decision making
JEL Classification: A12, G00, G10, G11, G12, G14
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