The glossary

Behavioral finance

Behavioral finance is social science that studies how psychological factors, such as emotions, play a role in financial decisions and how they influence markets overall.

Anecdote

Behavioral biases tend to lead investors to make bad decisions. But not always! In 2008, two American scholars, Richard Thaler and Cass Sunstein (who later won a Nobel prize) developed a theory that leverages on people bias to help them make best decisions. It is called the Nudge theory.