Behavioral finance results from an interdisciplinary convergence of cognitive psychology and financial economics. The apparition of behavioral approach in finance is generally dated back to the 1980s and this emergence is directly in line with the development of a more behavioral economics. A few books or papers are dedicated to the history of behavioral finance. However, some elements favorable to the emergence of behavioral approach in economics and finance existed before the 1950s (before the advent of behavioral economics). This paper presents an archeology of behavioral finance by proposing a historical analysis between contemporary behavioral and some forerunner works developed in the first part of the 20th century.

In the context of diversification of knowledge in finance (Schinckus, 2008), behavioral finance is a new approach which studies the financial reality by taking into account the psychological dimension of investment. In the past 30 years, neoclassical finance and its masterpieces1 have been challenged by empirical evidence and psychological studies.2 Progressively, behavioral finance has become a strong alternative framework to neoclassical finance and some authors (Thaler, 1999) do not hesitate to present this field as the future main paradigm of financial economics.

The emergence of the behavioral approach in finance is generally dated back to the 1980s (Schinckus, 2009), but a few papers are dedicated to the presentation of the investors’ behavioral analysis developed in the first part of the 20th century. In their book entitled, The Story of Behavioral Finance, Adams and Finn (2006) date the emergence of this paradigm in the 1980s as the result of a convergence of the advances in psychology and financial economics. Schleifer (2002, p. vi) explains that when he was a graduate student in the 1980s, “there were only a handful of academic papers in behavioral finance written by people like Robert Shiller, Larry Summers and Richard Thaller”. According to Shefrin (2002, p. 7), behavioral finance burgeoned when the advances made by psychologists came to the attention of the economists. The author claims that we had to wait until the 1980s to have, in finance, a true behavioral perspective founded on an organized body of knowledge.

Behavioral Finance Journal, Initial Public Offering, Capital Structure Theory, Academic Literature, Mergers and Acquisitions, Financial Investors, Information Asymmetry, Institutional Investors, Discounted Cash Flow, Firm Valuation, Indian Markets, IPO Market.