Investors In Securities Of Non-rational Behavior

The field of traditional financial theory is building on the assumption that investors behave with perfect rationality which is one of the influence of the rationalism upon economics. But more and more anomalies in security market doubt the assumption that investors are perfect rationality. This paper tries to research the irrational behaviors of the investors. Combining with classical economics, philosophy, psychology and behavioral finance, setting on the basis of precise definition of rational and irrational behavior of investors, the paper offered an empirical description of the main irrational behaviors of the security market which are explained with the theory of cognitive psychology, social psychology and motional psychology. Also I established a mathematical model to explain these irrational behaviors. At the end of the paper, I offered some recommendations to correct the irrational behaviors of the security market.The research of behavioral finance in our country is at the beginning stage. The arguments on some conceptions and the lack of knowledge in psychology hold back the development of behavioral finance. So I think the definition of some conceptions and the comprehensive research in psychology in my paper will be valuable.