Keywords
Market Efficiency, Behavioral Finance, Efficient Market Hypothesis, Efficient Market anomalies, Efficient Market limitations, Rational investors, Bounded rationality, Investment philosophy
How to Cite
FAKHOURY, S. (2020). Market Efficiency vs. Behavioral Finance. Proche-Orient Études En Management, 32(1), 13-31. Retrieved from https://journals.usj.edu.lb/poem/article/view/407
Abstract
This article discusses two of the most important theories in modern finance, the Efficient Market Theory and the Behavioral Finance Theory. The understanding of those theories will help shape each investor’s investment strategy. It concludes that a paradigm shift is actually happening. Both traditional and behavioral elements will be combined in order to better understand the way markets function and the nature of its actors.