Behaviorist

DEFINITION of 'Behaviorist'

1. One who accepts or assumes the theory of behaviorism (behavioral finance in investing.)

2. A psychologist who subscribes to behaviorism.

BREAKING DOWN 'Behaviorist'

When it comes to investing, people may not be as rational as they think. Behaviorists argue that investors often behave irrationally when making investment decisions thereby incorrectly pricing securities, which causes market inefficiencies, which, in turn, are opportunities to make money.

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