Here we review several common pitfalls that investors face and how to try to overcome them. 1. Anchor trap. First, there is something called the anchor trap, which refers to an over-reliance on. Companies have even started hiring “Chief Behavioral Officers” to integrate human psychology into the design of their products. It's increasingly common in finance and fintech: Dan Ariely. The psychology of risk: the behavioral finance perspective. A psychological approach to finance or behavioral finance is applied in this research due to the assumption that human beings. Financial psychology in a nutshell. Psychology focuses on the cognitive, behavioral and emotional aspects of being human. Economics, on the other hand, is “a social science concerned primarily with the description and analysis of production, consumption, and the transfer of wealth” Merriam-Webster. The best behavioral finance books. 1. The Little Book of Behavioral Investing: How Not to Be Your Worst Enemy by James Montier. The Little Book series, which features classics like The Little Book of Common Sense of Investing by John Bogle and The Little Book that Beats the Market by Joel Greenblatt, brings us another gem, Key Takeaways. Maslow's Hierarchy of Needs is a motivational theory in psychology comprising a five-level model of human needs, often described as hierarchical levels within a pyramid. The five levels of the hierarchy are physiology, security, romantic belonging, esteem and self-actualization. Lower level basic needs like food, water,