Traditional vs. Behavioral Finance: A Historical and Conceptual Framework

Behavioral finance is a fully developed discipline that has its own theo？y base as well as methods and methodology. Its area of research is human psychology on financial decision-making, and it is known that its roots go back as far as the 1950s. Behavioral finance developed theories with the view that people in decision-making positions could only be rational up to a certain point and separated from traditional finance theories in that individuals could not only act with a profit motive but could also make decisions with other motives. This study is an attempt to examine the factors affecting the financial actors in terms of where behavioral finance, which combines behavioral and cognitive psychology and financial sciences, differs from classical finance theories defending rationality