archiveCognitive Bias

Understanding the Importance of Behavioral Finance in Decision-Making
Finance

Understanding the Importance of Behavioral Finance in Decision-Making

Behavioral finance is the study of the psychological and emotional factors that influence financial decision-making. Traditional finance theory assumes that people make rational decisions based on complete information and logical analysis. However, behavioral finance recognizes that individuals often make decisions based on emotions, biases, and heuristics that can lead to...