Overview

Original Research

“BEHAVIORAL FINANCE: DELINEATION AND COALESCENCE OF HUMAN BEHAVIOR & INVESTMENT DECISIONS”

Dr. MANISHA 1, Dr. MANISH DIDWANIA 2, and Dr. MEENA SHARMA 3.

Vol 18, No 03 ( 2023 )   |  DOI: 10.17605/OSF.IO/4T8Z7   |   Author Affiliation: Assistant Professor, School of Business, Mody University of Science and Technology 1; Professor, School of Business, Mody University of Science and Technology 2; Assistant Professor, School of Business 3.   |   Licensing: CC 4.0   |   Pg no: 1291-1301   |   Published on: 29-03-2023

Abstract

While the traditional academics in finance accentuate theories such as modern portfolio theory and the efficient market hypothesis, behavioral finance emanates the psychological and sociological issues that influence the decision- making process of individuals, groups and organizations. The convergence between human behavior and investment decision making has since evolved as “behavioral finance”. A large number of researchers have indicated that the investment decision-making process is more human than logical because of human biases. The paper discusses the history of behavioral finance, traditional financial theories and concepts of behavioral finance. This paper throws light on the importance of behavioral finance and its origin & evolution, a brief history of this new unconventional form of finance and the theories related to it. In the words of, Olsen R. (1998) “behavioral finance seeks to understand and predict systematic financial market implications of psychological decision process.”

Keywords

Behavioral Finance; Behavioral Anomalies; History of Behavioral Finance, Traditional Finance Theories; Decision Making