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A field of finance that proposes psychology-based theories to explain stock market anomalies and investor behaviors.

A theory that evaluates how investors choose between probabilistic alternatives and demonstrates loss aversion, where losses are perceived as significantly more potent than gains.

Simple, efficient rules which people often use to form judgments and make decisions, sometimes leading to systematic biases or errors.

A situation in which an individual overestimates their own abilities or the accuracy of their predictions, often leading to poor decision making.

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions, which can result in statistical errors.

An effect where individuals react differently to a particular choice depending on how it is presented, such as a loss or a gain.

A behavioral finance concept that entails the grouping of money into separate accounts based on subjective criteria, like the source of the money or its intended use.

A cognitive bias that describes the common human tendency to rely heavily upon the first piece of information offered (the 'anchor') when making decisions.

A phenomenon where individuals in a group act collectively without centralized direction, particularly in buying and selling securities.

The inclination to see events that have already occurred as being more predictable than they were before they took place.

A principle that suggests individuals prefer avoiding losses over acquiring equivalent gains; the pain of losing is psychologically more powerful than the satisfaction of winning.

The mistaken belief that if an event has occurred more frequently than normal during the past, it is less likely to happen in the future, and vice versa, when the events are truly independent.

The tendency of investors to sell assets that have increased in value, while retaining assets that have dropped in value, often to avoid regret or realization of a loss.

A behavioral economic hypothesis wherein people ascribe more value to things merely because they own them.

A financial theory stating that asset prices fully reflect all available information, making it impossible to consistently achieve higher than typical market returns.

A tendency to avoid decision making out of fear of experiencing regret and, consequently, often preferring to maintain the status quo.

A time-inconsistent model of discounting which suggests individuals tend to prefer smaller, immediate rewards to larger, later rewards. Valuation decreases over time disproportionately.

The tendency to interpret the world through stories and anecdotes rather than thorough statistical analysis, thus affecting financial judgments and decision making.

A bias where people disregard probability when making a choice under uncertainty, often focusing on potential outcomes instead of the likelihood of occurrence.