Psychology influences markets
Monday, July 1, 2013 - 15:30
in Psychology & Sociology
When it comes to economics versus psychology, score one for psychology. Economists argue that markets usually reflect rational behavior -- with the dominant players in a market, such as hedge-fund managers, almost always making well-informed and objective decisions. But psychologists say that markets are not immune from human irrationality. A new analysis supports the latter case, showing that markets are indeed susceptible to psychological phenomena.