Neuro finance, Perspective of Behavioral Finance

Subject Areas : Journal of Investment Knowledge

Shokrollah Khajavi ¹ , Hassan Fattahi Nafchi ²

1 - Associate Professor in Shiraz University
2 - M.A Finance of Shiraz University

Received: 2013-05-08 Accepted : 2013-08-11 Published : 2013-08-11

Keywords: Neurofinance, Neuroeconomic, Behavioral Finance, Neurosience, Financial Decision,

Abstract :

Using various sciences in solving problems have been developed significantly in recent years. In 1979 Kahneman and Tversky proposed a new school premises known as behavioural finance. In behavioural finance, by using the combination of psychology and finance, a perspective is presented which is able to explain financial decisions. The purpose of this research is the study of neurofinance literature by using the psychological science. neurofinance is a very young discipline that attempts to relate the brain processes to behavior. In this study by providing the answers for 5 questions in 7 sections, the process of emergence of neurofinance, brain function in decision making, design, methodology and approach, the difference between behavioral and neuro finance, their applications, Criticisms in this area and the results of this study are investigated . The findings showed that human’s brain is similar to a black box. When an event occurs, the brain records every moment and therefore we can prevent mistakes by processing recorded features. By knowing this, decision makers can make optimum decisions.