Behavioral Finance: History and Foundations
a Tallinn University of Technology, Tallinn, Estonia
Abstract

Recent evidence suggests that ideology has the potential to affect academic research in economics and that exposure to a wide range of approaches may increase intellectual diversity, eventually leading to better decisions. Therefore, writing a literature review in behavioral finance, in principle, can bring benefits to a wide range of readers, especially since the field of behavioral finance itself has already grown into a complex web of related but distinct sub-fields and reached a stage when it can guide policy decisions. This review differs from the existent ones as it focuses on the history of the field and its psychological foundations. While the review of psychological foundations is necessary to appreciate the benefits of a behavioral approach and understand its limitations, even a brief historical detour may provide a compelling case against a naive dichotomy between behavioral and classical finance.

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Avaliable online 29 March 2017
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Cite as: Illiashenko, P. (2017). Behavioral Finance: History and Foundations. Visnyk of the National Bank of Ukraine, 239, 28-54. https://doi.org/10.26531/vnbu2017.239.028
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