Behavioral Financial Theory and the Development of Contemporary Finance

Abstract

Behavioral Finance is a theory which has increasingly boomed since 1980s and tried to explain the actual behaviour in financial market. The development of behavioral financial theory has given rise to a revolution in contenporary finance. Athough the development of this theory has not formed an integrate theoretical system up to now, it has at least made an active try in three aspects including the change of paradigm , theoretical creation and method innovation in order to push forward the development of finance theory.