Behavioural Finance Then and Now

Abstract

Behavioural finance, a relatively new field that is constantly developing, has grown up to criticize the assumptions and theories of standard finance. The aim of this article is to present the development of behavioural finance of the first and the second generation. The first generation of behavioural finance focused on the analysis of irrational decisions made by rational actors. The second generation of behavioural finance considers the decision-making processes of normal people. Its further development will be based on the achievements of neuroeconomics.