The Human Investor: beyond rationality in financial decisions.

Identifier:  TFG:9285

Handle: https://hdl.handle.net/20.500.11797/TFG9285

Authors:  Marca Bergadà, Núria

Abstract:
This paper is a critical and empirical analysis of investor behavior that challenges the fundamentals of classical economic theory. The paper questions the figure of homo economicus, a rational, cold and consistent agent, and claims a more realistic, complex and human vision: homo sapiens, who decides influenced by emotions, beliefs and cognitive limitations. Based on the Prospective Theory, it examines how individuals face situations of risk and uncertainty, and how cognitive biases distort the perception of risk and condition financial decisions. These effects are not sporadic errors, but predictable patterns that challenge the traditional model of rationality. Using a mixed methodology, the paper combines a rigorous theoretical review with field research based on surveys designed to detect irrational behaviors in individuals not trained in finance. The conclusions are convincing: the investor is, first and foremost, human. This implies that any economic or financial model that aspires to understand the market must incorporate the contributions of cognitive psychology, neuroscience and real observed behavior.