The behavioral approach asserts the presence of “irrational” investors, also called
“sentiment” investors or “noise traders” whose investment decisions, choices, etc, are
conducted by feelings and emotions and based on sentiment which plays a major role in their
decisions.
Before going more in the details, it is reasonable to begin by presenting some definitions of
the most important notions in this section. Clarifying some notions is important to understand
the theories and the findings of many researchers.