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The impact of psychological factors on financial behaviour: A Systematic Literature Review
[L'impact des facteurs psychologiques sur les comportements financiers : Une revue de littérature systématique]

Author

Listed:
  • Noureddine Abdelbaki

    (ENCGK - ENCG University Ibn Tofail of Kenitra, Morocco)

  • Rajae Sabhi

    (ENCGK - ENCG University Ibn Tofail of Kenitra, Morocco)

  • Soumaya Outellou

    (ENCGK - ENCG University Ibn Tofail of Kenitra, Morocco)

Abstract

Traditional financial theory assumes that investors act rationally in an efficient market, while carefully analyzing the available information in order to make decisions. Therefore, the Efficient Market Hypothesis (EMH) extends this idea to competitive markets where players seek to maximize their profits without any individual influence on prices. However, behavioral finance arose from the inability of this theory to explain certain financial anomalies. Behavioral finance explores actual investor behavior, using social and cognitive psychology to reveal systematic errors and biases influencing investment decisions. It asserts that investors are prone to psychological biases that lead to irrational choices. Indeed, the objective of this article is to highlight the determinants that significantly influence the achievement of behavioral finance goals; while building on an in-depth analysis of previous research (Systematic Literature Review), which examines how cognitive biases and psychological influences affect investors' financial decisions.

Suggested Citation

  • Noureddine Abdelbaki & Rajae Sabhi & Soumaya Outellou, 2023. "The impact of psychological factors on financial behaviour: A Systematic Literature Review [L'impact des facteurs psychologiques sur les comportements financiers : Une revue de littérature systémat," Post-Print hal-04333925, HAL.
    • Handle: RePEc:hal:journl:hal-04333925
    Note: View the original document on HAL open archive server: https://hal.science/hal-04333925
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