behavioural finance

Behavioral finance is a field that studies how people's emotions, biases, and psychological factors influence their financial decisions. It recognizes that investors don’t always act logically or rationally, often driven by fear, greed, or habits. These tendencies can lead to market trends and deviations from traditional economic theories that assume rational behavior. Understanding behavioral finance helps explain phenomena like market bubbles, crashes, and investment mistakes, providing insight into how human psychology impacts financial markets and individual decision-making.