THE ROLE AND PLACE OF BEHAVIORAL FINANCE TO FINANCE LITERATURE

Traditional and modern finance theories have not been able to explain why people did not always make rational decisions. Behavioral finance is a new field of finance, that recently attracting more attention and emerged from the view of human beings who do not always act rationally in their investment decisions. This paper aims to revise the discussion on behavioral finance as well as to outline its contribution to both finance and psychology. Moreover, it presents some principles of behavioral finance such as overconfidence and risk tolerance, and therefore contributes to the empirical studies in behavioral finance by using the SEM as (Structural Equation Modeling) approach.

Anahtar Kelimeler:

finance, behavioral finance, investment decision

THE ROLE AND PLACE OF BEHAVIORAL FINANCE TO FINANCE LITERATURE

Keywords:

finance, behavioral finance, investment decision,

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