Behavioral Finance: Investor Preferences, Market Anomalies, Shortcuts and Biases
Synopsis
The main purpose of researching behavioral finance and investment preferences is to understand investor psychology by evaluating investment behavior in a real framework and to associate it with the behavior supported by standard finance theories. Behavioral finance; explains the irrational behavior of the players in the market and their deviations from market efficiency. The source of the anomalies observed in the markets shows that some financial assets are under the influence of psychological tendencies in the decision-making processes of individuals. Because of their biases, investors prefer to trade only in the market for which they have more information, rather than a thorough analysis of all available and relevant information.
In this case, various prejudices and biased behavioral patterns emerged, and the economics literature expanded by also addressing psychology. In this context, this book aims to give an idea to the readers by covering many aspects of behavioral finance. At the same time, this research has various implications for seeing, analyzing and understanding market trends more clearly.