2021 Student Research Conference:
34th Annual Student Research Conference

Implications of Behaviorism on Financial Decision Making


Neer Patel
Prof. Charles Boughton, Faculty Mentor

The increased usage of technology has affected the way investors trade securities today. With the free trading apps such as Robinhood, new investors can easily sign up to start investing for their future. While not everyone can gain proper understanding of the financial markets, it is necessary to understand behavioral implications on financial decision making.

            Traditional finance theory and behavioral finance theory are two different theories that elaborate on the investor’s decision making. Traditional finance theory suggests that investors and the  financial markets are rational, meaning that people make decisions based on gathered information. Alternatively, behavioral finance discusses that investors make decisions based on emotions or non-rational factors.

            The aim for the research is to explore each of the two theories in detail, analyze any similarities and differences, discuss the efficient market hypothesis, and explain several big biases in behavioral finance. 

 

Keywords: Behavioral Finance, Traditional Finance Theory, Decision making, Investments, Stock market

Topic(s):Business Administration
Psychology

Presentation Type: Asynchronous Virtual Oral Presentation

Session: 5-4
Location: https://flipgrid.com/6a0ea4e7
Time: 0:00

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