INTRODUCTION TO BEHAVIORAL FINANCE

The classical financial paradigm, based entirely on the efficiency of financial markets and the rationality of investors, is the cornerstone of economic theory. Its importance in revolutionizing financial strategy is well established. The main valuation models - CAPM, APT, Modigliani-Miller and Black-Scholes-Merton - all owe their existence to this paradigm. It therefore seems understandable that leitmotifs relating to the efficiency of financial markets and the rationality of investors have always been the most prevalent in scientific financial circles. However, the hegemony of this paradigm has been called into question by certain episodes of financial crisis, generated in particular by bubbles. The crises of the last three decades have led to the emergence of a new approach to the analysis of financial phenomena: Behavioral Finance.