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Behavioural Finance: The Psychology Behind Financial Decisions and Investor Behaviour - Couverture souple

Lakshman, Sangeetha; Thomas, Riya; Davis, Mary

 
9789999352239: Behavioural Finance: The Psychology Behind Financial Decisions and Investor Behaviour

Synopsis

Behavioural Finance: Understanding Investor Behaviour, Psychology and Financial Decision-Making explores the fascinating relationship between human psychology and financial decision-making. Unlike traditional finance, which often assumes that investors behave rationally, behavioural finance recognizes that emotions, cognitive biases, perceptions, and social influences can significantly shape financial choices. The book introduces key concepts in behavioural finance, including investor psychology, rationality, emotional influences, cognitive biases, heuristics, prospect theory, mental accounting, and the disposition effect. It also examines how fear, overconfidence, herding behaviour, panic selling, and other behavioural patterns influence investment decisions and financial markets. The book further explores arbitrage, the role of professional arbitrageurs, noise trader risk, limits to arbitrage, risk perception, and predictable patterns in investor demand. It highlights how psychological and behavioural factors can contribute to market anomalies, bubbles, irrationality, and deviations from traditional financial theories. Written in a clear and accessible manner, this book provides students, educators, researchers, and aspiring finance professionals with a comprehensive introduction to the behavioural dimensions of financial markets. It encourages readers to look beyond numbers and models and understand the human behaviour behind financial decisions.

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