Principles Of Behavioural Finance

Principles of Behavioural Finance is a comprehensive and student-friendly textbook designed to introduce undergraduate learner to the psychological foundations of financial decision-making. Blending insights from economics, psychology and real-world market behaviour, the book explains why investors, managers and markets often deviate from perfect rationality and how these deviations create patterns, biases and anomalies in the financial world. Structured across five well-defined modules, the book begins by laying the conceptual groundwork of behavioural finance. Students explore the limitations of classical finance, the evolution of behavioural thinking and the role of bounded rationality, cognitive constraints and emotional influences. Through relatable examples including major Indian cases such as the Paytm crash, Zomato IPO mispricing and Yes Bank crisis, learn how real markets often defy theoretical expectations.