Amalgamating Psychology and Economics: The Devise of Behavioral Economics and the Emergence of Behavioral Finance

Abstract

Amalgamating Psychology and Economics the Devise of Behavioral Economics and the Emergence of Behavioral Finance is the study of historic perspective of development of behavioral economics and the budding behavioral finance. This study describes how the psychologist and economists came to gather with their ideas, theories and axioms amalgamated and the formulation of behavioral finance. This study has enlisted some psychologist and economists who had extra ordinarily contributed in the field development of behavioral economics so as the behavioral finance Those eminent peoples are David Ricardo, John Stuart Mill, Milton Friedman, John von Neumann, Oskar Morgenstern, Paul Anthony Samuelson, Leonard Jimmie Savage, Maurice Felix Charles Allais, Ellsberg, Paul Slovic, Amos Nathan Tversky, Daniel Kahneman, Eugene Fama, and Richard H. Thaler.Amalgamating Psychology and Economics the devise of Behavioral Economics and the emergence of Behavioral Finance gives the snapshot of chronological development of behavioral finance well supported with the evidences of its theories. This paper also explains violation of axioms of standard finance and economics by behavioral finance researchers therefore put forward their theories and models.