Review paper on impact of behavioral biases in financial decision- making
نویسندگان
چکیده
Traditional finance is constructed on four principles which are portfolio of Markowitz, the arbitrage Miller and Modigliani, capital asset pricing model Sharpe, Lintner Black option-pricing Black, Scholes, Merton, These conclude that market efficient competent. Patrons traditional recommend individual behavior frequently reflect rationality. EMH Samuelson also explains people behave rationally, maximize their expected utility process all available information. states stock prices It impossible to “beat market” consistently a risk adjusted basis since price should only react Proponents state investors who access rational. But in reality cannot act rationally time. They influenced by psychological factors like mind, emotions, trading theories, values interpretation information, mislead them as irrational investors, (Kahneman Tversky). Daniel Kahneman Amos Tversky were known fathers behavioural finance. Though, many literary works carried out Proponent advocate influence bias. From above findings, it concludes Most standard theories give more importance fundamental instead decision making individuals. Therefore, there necessitating developing modern study these irregularities. The main aim this paper how investment individuals through review literature from secondary sources Journals, Magazines, Books etc. has tried discover relationship between behavioral biases decisions market. result will help improve identifying most important factor.
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ژورنال
عنوان ژورنال: World Journal Of Advanced Research and Reviews
سال: 2022
ISSN: ['2581-9615']
DOI: https://doi.org/10.30574/wjarr.2022.16.2.1236