For the purpose of gaining an understanding of how individuals make choices about their finances, the area of “Behavioural Finance” brings together concepts from the fields of psychology and economics.
An investigation of the cognitive mistakes and psychological biases that affect investors and markets is presented. Several issues, including herd behaviour, overconfidence, loss aversion, and the influence of emotions on investing decisions, are discussed in depth throughout the book.
To demonstrate how people stray from rational decision-making when it comes to the management of their money, authors in this discipline often explore real-world examples and experiments.
Prominent individuals in the discipline comprise Daniel Kahneman, Amos Tversky, Richard Thaler, and Robert Shiller, all of whom have made substantial contributions to the body of knowledge regarding the intersection of human psychology and financial decision-making through their research.
Anyone interested in understanding the complexities of human behaviour in relation to financial situations will find “Behavioural Finance” to be an invaluable resource. This includes investors, economists, psychologists, and others.