An Investigation of the Association Between Behavioral Economics and Financial Behavior

Economics is a science that investigates human behaviors. The rational person of Classical and Neoclassical Economics and the person with bounded rationality of behavioral economics are affected by individual, psychological, and social factors in their economic decisions. These factors are the fundamental determinants of the financial behaviors exhibited by the individuals in a society. These factors that affect individual financial decisions transform the rational person of classical economics into an individual with bounded rationality, which draws the theoretical framework of the concept of bounded rationality. This study provides a theoretical framework for an association between behavioral economics and financial behaviors. The central thesis of this study is that financial behaviors are an integral part of behavioral economics studies. When an interdisciplinary approach is taken, both fields examine the individual, psychological, and social factors that affect individuals' economic decisions. Although behavioral economics is considered a separate field, this study shows that individuals' economic behavior and decision-making are also examined within the scope of financial behavior.