Abstract:

In the theories of finance developed from the past to the present and in the models produced, it is defended that individuals take into account all the information they behave rationally and can obtain in their investment decisions. But the recent anomalies observed in the financial markets have revealed the fact that investment decisions are not always rational. Therefore, Behavioral Finance has been born, trying to explain why savings owners make unrational decisions in their savings, investments and spending, and has been trying to understand and explain how emotions and perception errors affect investors and decision making processes. In this study, we will try to address the effectiveness of the Active Markets Hypothesis, which is claimed to be insufficient in reflecting the general situation in finance and represents the specific situations, and in contrast, the effectiveness of Behavioral Finance, which also takes into account the effects of social, cognitive and emotional prejudices.

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