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Open Access Journal Article

Behavioral Finance and Investor Decision Making

by Michael Anderson 1,*
1
Michael Anderson
*
Author to whom correspondence should be addressed.
EFRL  2019 1(1):3; https://doi.org/10.69610/j.efrl.20191030
Received: 16 August 2019 / Accepted: 30 September 2019 / Published Online: 30 October 2019
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Abstract

The field of behavioral finance has emerged as a crucial area of study in the realm of finance, focusing on the psychological and emotional factors that influence investor decision-making. This paper explores the impact of behavioral finance on investor choices and the subsequent implications for financial markets. By analyzing various behavioral biases and heuristics, the study reveals how investors often deviate from rational decision-making models, leading to market inefficiencies and asset mispricings. The paper discusses key concepts such as overconfidence, loss aversion, and herd behavior, highlighting their role in shaping investor behavior. Additionally, the paper examines the strategies employed by investors to mitigate these biases and improve decision-making processes. Through a comprehensive analysis of the literature, this study underscores the importance of integrating behavioral finance principles into investment strategies and regulatory frameworks to enhance market stability and investor welfare.

Keywords: Behavioral finance; Investor decision-making; Financial markets; Behavioral biases; Market inefficiencies.;
Copyright: © 2019 by Anderson. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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APA Style
Anderson, M. (2019). Behavioral Finance and Investor Decision Making. Economics and Finance Research Letters, 1(1), 3. doi:10.69610/j.efrl.20191030
ACS Style
Anderson, M. Behavioral Finance and Investor Decision Making. Economics and Finance Research Letters, 2019, 1, 3. doi:10.69610/j.efrl.20191030
AMA Style
Anderson M. Behavioral Finance and Investor Decision Making. Economics and Finance Research Letters; 2019, 1(1):3. doi:10.69610/j.efrl.20191030
Chicago/Turabian Style
Anderson, Michael 2019. "Behavioral Finance and Investor Decision Making" Economics and Finance Research Letters 1, no.1:3. doi:10.69610/j.efrl.20191030

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ACS Style
Anderson, M. Behavioral Finance and Investor Decision Making. Economics and Finance Research Letters, 2019, 1, 3. doi:10.69610/j.efrl.20191030
AMA Style
Anderson M. Behavioral Finance and Investor Decision Making. Economics and Finance Research Letters; 2019, 1(1):3. doi:10.69610/j.efrl.20191030
Chicago/Turabian Style
Anderson, Michael 2019. "Behavioral Finance and Investor Decision Making" Economics and Finance Research Letters 1, no.1:3. doi:10.69610/j.efrl.20191030
APA style
Anderson, M. (2019). Behavioral Finance and Investor Decision Making. Economics and Finance Research Letters, 1(1), 3. doi:10.69610/j.efrl.20191030

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