Behavioral Finance: A Comprehensive Overview ...

Behavioral Finance: A Comprehensive Overview of Investor Psychology in Making Decisions

Author Name : Jyoti, Ajay Kumar, Dr. Bhawana Yadav, Ronak

ABSTRACT The present study offers a comprehensive analysis of behavioral finance, with a particular emphasis on the complex interactions that exist between investor psychology and financial market decision-making processes. Behavioral finance differs from standard financial theory in that it recognizes the impact of psychological elements on market participants and challenges the assumption of rational and utility-maximizing behavior. The study explores the different cognitive biases, emotional cues, and social influences that affect market dynamics via influencing investor decisions the study uses a comprehensive methodology to investigate the main ideas in behavioral finance, such as herding behavior, prospect theory, loss aversion, and overconfidence. The research clarifies how these behavioral biases contribute to market oddities, bubbles, and collapses by using empirical studies and real-world examples. It also looks at the effects on financial policy, risk assessment, and portfolio management.