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Neurofinance: Getting An Insight Into The Trader'S Mind

Author

Listed:
  • Dedu Vasile

    () (Academia de Studii Economice Bucuresti, Academia de Studii Economice Bucuresti)

  • Turcan Ciprian Sebastian

    () (Academia de Studii Economice - Bucuresti)

Abstract

Much of the academic finance theory is based on the assumption that individuals act rationally and behavioral finances treats investorsâ€(tm) choice based by behavioral biases. In contrast, neuro-finance (as a blending of psychology, neurology and finance) attempts to understand behavior by examining the physiological processes in the human brain when exposed to financial risk. Scientists map the mind to learn how fear and greed drive the financial markets. The paper, will briefly present why neurofinance is important and how will be able to provide in the near future a number of effective tools for improved financial decision making.

Suggested Citation

  • Dedu Vasile & Turcan Ciprian Sebastian, 2010. "Neurofinance: Getting An Insight Into The Trader'S Mind," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 723-729, December.
  • Handle: RePEc:ora:journl:v:1:y:2010:i:2:p:723-729
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    File URL: http://anale.steconomiceuoradea.ro/volume/2010/n2/114.pdf
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    More about this item

    Keywords

    Emotions; Behavioral Finance; Neurofinance; Brain; Risk taking; Affect; Beliefs; Dopamine; fMRI;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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