Investors Behaviour between Theory and Practice
From the outside, financial markets appear dry and technical. However, their inner mechanism is psychological. Thus, this paper is dedicated to personality psychology, whose mastery is crucial to the investment game. Theory is different from practice, and that is why modern economic theories focus more on the psychological knowledge of the participants to the investment environment. Traditional economic model of the market have assumed that individuals/investors are “fully rational” and make decision optimally. In contrast, psychology has observed how they fail to be rational from an economic viewpoint when making decisions in the markets.
Volume (Year): 2 (2012)
Issue (Month): Special 1 (May)
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- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
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