Behavioral Finance

Description of Behavioral Finance. Explanation.

Definition Behavioral Finance. Description.

Behavioral Finance is the study of behavior of parties in financial markets. The approach focuses on observable psychological factors that influence decision-making during periods of economic uncertainty.

The field applies scientific research on human and social cognitive and emotional biases to better understand economic decisions and how they affect market prices, returns and the allocation of resources. The fields are primarily concerned with the rationality, or lack thereof, of economic agents. Behavioral models typically integrate insights from psychology with neo-classical economic theory.

Compare with: Cognitive Bias  |  Investor Sentiment  |  Short Selling  |  Analogical Strategic Reasoning  |  Bounded Rationality  |  Framing  |  Groupthink  |  Index Fund  |  Mutual Fund  |  Qualitative Investment Analysis  |  Whisper Number  |  Feedback Loops

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End of description Behavioral Finance. An explanation.