The purpose of this paper is to introduce the special issue of Review of Behavioural Finance entitled “Behavioural finance: the role of psychological factors in financial decisions”.
The authors present a brief outline of the origins of behavioural economics; discuss the role that experimental and survey methods play in the study of financial behaviour; summarise the contributions made by the papers in the issue and consider their implications; and assess why research in behavioural finance is important for finance researchers and practitioners.
The primary input to behavioural finance has been from experimental psychology. Methods developed within sociology such as surveys, interviews, participant observation, focus groups have not had the same degree of influence. Typically, these methods are even more expensive than experimental ones and so costs of using them may be one reason for their lack of impact. However, it is also possible that the training of finance academics leads them to prefer methodologies that permit greater control and a clearer causal interpretation.
The paper shows that interdisciplinary research is becoming more widespread and it is likely that greater collaboration between finance and sociology will develop in the future.
