Year: 2025
Type: article
Abstract: Behavioral finance combines disciplines such as psychology, behavior, and sociology to reveal the irrational behavior of investors in the decision-making process and its impact on the financial market. This article explores the impact of behavioral finance on investment decisions from the perspectives of cognitive biases, emotional fluctuations, and market anomalies. Mainly using qualitative research methods, relying on the synthesis and analysis of existing literature and theoretical frameworks to draw conclusions and propose future research approaches. It analyzes key concepts such as overconfidence, anchoring effects, loss aversion, and psychological account theory, and points out the shortcomings and future directions of current research. Research has shown that investors' psychological biases and emotional fluctuations significantly affect their decision-making behavior, leading to market anomalies and price fluctuations. This article also explores the interactive relationship between financial literacy and behavioral finance, emphasizing the importance of improving financial literacy and correcting behavioral biases to promote stability and efficiency in financial markets.
Author: Wanxin Wu
Institution: Guizhou University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4410128231