Applied Fin ance | Journals | Books and Articles

The IUP Journal of Applied Finance

Behavioral Finance and Future Research Agenda: A Bibliometric Analysis

Article Details

Pub. Date	: Oct, 2022
Product Name	: The IUP Journal of Applied Finance
Product Type	: Article
Product Code	: IJAF031022
Author Name	:Kiran Yadav, Shikha Daga and Bhavna Yadav
Availability	: YES
Subject/Domain	: Finance
Download Format	: PDF Format
No. of Pages	: 15

Price

Download

Abstract

Behavioral finance is a new paradigm that provides alternatives to the assumptions of traditional finance and articulates investor psychology in investment decision-making. The study seeks to conduct a bibliometric analysis of behavioral finance, using the two most popular databases, Web of Science and Scopus. The combination of the two databases resulted in a huge volume, highlighting the growth in this particular area of study. The analysis of the collected sources has been done using Biblioshiny, a bibliometrics tool package in R software that provides various analyses, including citation analysis, bibliographic coupling, and keyword analysis, among others. The present study provides a comprehensive analysis of the behavioral finance field from the 1970s to 2022, including current publication trends, the most cited authors, influential studies, and research themes in this domain. The findings of the study will provide insight into behavioral finance and benefit further studies in the field.

Introduction

Standard finance assumes that people are rational, whereas according to behavioral finance, which proposes psychology-based theories to explain market outcomes, people are normal (Statman, 1999). In other words, behavioral finance complements financial economics by adding psychology (Shefrin, 2000). The irrational understanding of investors has become one of the most important concerns of financial market analysts since the sharp rise in stock prices in the late 1990s and the subsequent bursting of the technological bubble. Hence, it explains how investors process information and make better decisions. Although behavioral finance is not a new field, it originated around 1912. Behavioral finance gained popularity as a new school of thought (Selden, 1912) when Kahneman and Tversky (1979) presented the prospect theory and developed it in 2002, and when psychologist Daniel Gilbert received the Nobel Prize. Behavioral finance is a field that tries to explain the psychology of human beings and how their decisions are affected by emotions. So, it can be seen that the field of behavioral and experimental economics and finance has grown, intending to prove that behavioral, cognitive, and emotional factors together play a role in decision making. It aims to improve financial decision-making by combining psychological and economic principles and involves a study of cognitive errors and emotions in financial decisions (Abdulrasool and Othman, 2020).