Behavioral Finance: A Comparative Analysis
Behavioral Finance: A Comparative Analysis
DOI:
https://doi.org/10.51473/rcmos.v1i1.2023.1026Keywords:
Behavioral finance. Investor behavior. Cognitive biases. Heuristics. Behavioral economics.Abstract
Behavioral finance emerges as a discipline that challenges the assumptions of absolute rationality and efficiency in traditional financial markets, incorporating psychological, emotional, and cognitive aspects into the understanding of investor behavior. This article presents a comparative analysis between traditional financial models and behavioral approaches, exploring the limitations of the former and the advances provided by the latter. It discusses the main cognitive biases and heuristics that affect financial decision-making, as well as the implications of these findings for market functioning and public policy. Additionally, the challenges and future prospects of the field are addressed, including the role of new technologies and economic neuroscience. The article is based on relevant studies and research up to 2022, including the work of Kahneman and Tversky, Thaler, Shiller, among others, offering an updated and critical perspective on the topic. It concludes that behavioral finance broadens the understanding of financial phenomena, providing essential tools to improve decision-making, regulation, and financial education, thus contributing to more efficient and inclusive markets. Furthermore, the article highlights the importance of interdisciplinarity for the development of behavioral finance, emphasizing how the integration of knowledge from psychology, experimental economics, neuroscience, and data science has the potential to deepen the analysis of human behavior in complex financial contexts. This convergence not only helps explain market anomalies but also supports the design of more effective interventions to mitigate the negative effects of behavioral biases. In a global scenario marked by volatility and recurring crises, understanding the nuances of human financial decision-making becomes essential for building resilient and sustainable strategies for individual investors, financial institutions, and regulators alike.
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