The New Era of Finance: Neurofinance and Investment behavior

This paper highlight the effect of neurofinance which is the study of brain of humans and their financial decision making behavior which explains the cause why humans are not balanced as per the rules of the conventional theory of finance. We have tried to explain and present the literature review and fusion of the literature on neurofinance in this paper.

Neuroscience is the subject which studies the functioning of human mind and how the financial decisions making process are influenced by the affective of neurological basis. When the neuroscience is studied with respect to investment environment, it is explained in form of Neurofinance. In this paper, role of important brain parts and enzymes like, Dopamine, Serotonin, Amygdala, Prefrontal Cortex etc at the events of loss, gain or volatility of stock price etc has been discussed.