Best Behavioral Finance Books

Advertiser DisclaimerWallStreetMojo is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com
Some of the links on this page will take you to products that we think you'll like. There is no additional cost to you, and it helps us earn money so we can continue to supply you with useful information.

List of Top 15 Behavioral Finance Books

Here is the list of books on behavioral finance so that you don’t need to spend hours and hours at stores to find out the best ones.

  1. Predictably Irrational ( Get this book )
  2. Thinking, Fast and Slow ( Get this book )
  3. Misbehaving: The Making of Behavioral Economics ( Get this book )
  4. The Little Book of Behavioral Investing ( Get this book )
  5. Behavioural Finance: Insights Into Irrational Minds and Markets ( Get this book )
  6. Behavioral Finance and Wealth Management ( Get this book )
  7. Behavioral Finance: Psychology, Decision-Making, and Markets ( Get this book )
  8. Behavioral Finance: Understanding the Social, Cognitive, and Economic Debates (Wiley Finance) ( Get this book )
  9. Behavioral Finance and Investor Types ( Get this book )
  10. Beyond Greed and Fear ( Get this book )
  11. Inefficient Markets ( Get this book )
  12. Personal Benchmark ( Get this book )
  13. Handbook of BehavioralFinance ( Get this book )
  14. Advances in Behavioral Finance (Roundtable Series in Behavioral Economics) ( Get this book )
  15. Advances in Behavioral Finance, Volume II ( Get this book )

Let us discuss each of the behavioral finance books in detail, along with its key takeaways and reviews.

Behavioral Finance Books

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Best Behavioral Finance Books (wallstreetmojo.com)

#1 – Predictably Irrational

by Dan Ariely

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions

This book gives a very interesting perspective about how a human brain functions in the most irrational way even when we actually deliberately try to make the best and rational decision.

Book Review

The placebo effect is one of the classic examples of how our brain functions and this book introduces you to many similar examples from different walks of life. The author has simply blended the commonplace experiences with innovative research experiments to counter the common belief that humans usually behave in rational ways. While reading you will realize how emotions, expectations, social norms, and other unseen forces make us commit the same mistakes every day. However, this irresponsible behavior is neither senseless nor random, but they are systematic and predictable. In short, the book states how the unknown hidden forces control our predictably irrational mind during a decision-making process.

Best takeaway from this book

  • The concept of behavioral science is backed by commonplace examples, which makes it easier for us to understand what the author intends to convey through the text.
  • This book can be an interesting read as well as academically useful for students pursuing behavioral finance.
<< Get this book >>

#2 – Thinking, Fast and Slow

by Daniel Kahneman

Thinking, Fast and Slow

As the name clearly suggests, this book primarily explains how our minds behave either in a fast, spontaneous, and emotional way or in a deliberately slow and logical way. It discusses the pros and cons of both ways of thinking.

Book Review

This book is very insightful and lucid, and it continuously throws intellectually surprising elements at you. Hence, we find it entertaining and at times touching. It engages us in a lively conversation with the author while he reveals the various secrets of our minds. The book guides us in understanding which of our intuitions can be trusted upon and in what scenario slow thinking is the best option. There are multiple practical and informative insights provided in the book that are based on both professional and personal experiences. If we are able to follow some of the techniques offered by the author, then we will realize that we can avoid some of the mental glitches that usually get us into trouble.

Best takeaway from this book

  • The book analyses the two ways of thinking in a very detailed way with some very interesting and quirky examples.
  • It can help us unearth many of our cognitive biases and fallacies, which has otherwise become part of our everyday life.
<< Get this book >>

#3 – Misbehaving: The Making of Behavioral Economics

by Richard H. Thaler

Misbehaving: The Making of Behavioral Economics

This book is Nobel laureate Richard Thaler’s autobiography wherein he has covered the core concepts of behavioral economics.

Book Review

The book gracefully presents a wealth of evidence to clearly demonstrate how the human mind misbehaves. The illustrations are engaging and frequently hilarious as it attempts to explain things that we usually don’t intend to discuss. It can potentially change your perception of economics and the world. The book reveals that we often succumb to our cognitive biases and make decisions that are considered to be aberrations to rational thinking. This is what has been termed as misbehaving in the text.

What is more important to know is that these misbehaviors usually have serious consequences. Most of the misbehaving acts illustrated in the book based on the author’s personal experience. Hence, he is able to offer useful tips to the readers on how to make better decisions in the mysterious world in which we live.

Best takeaway from this book

  • This book intends to highlight that a common man usually misbehaves due to cognitive biases.
  • It states how behavioral economic analysis can open up new ways of looking at things.
  • It offers a firsthand account of the entire illustrious professional career of a prominent economist.
<< Get this book >>

#4 – The Little Book of Behavioral Investing:

How Not to Be Your Own Worst Enemy

by James Montier

The Little Book of Behavioral Investing: How not to be your own worst enemy

The book discusses some of the most common behavioral challenges faced by investors and explains how these can impact the investment decision-making process.

Book Review

This book describes many time-tested ways of identifying and avoiding the pitfalls of investor bias. One of its most important messages is that we should learn from our past investment mistakes so that we don’t repeat them in the future. It explains in a straightforward and simple style the various behavioural principles that can help us maintain a successful investment portfolioInvestment PortfolioPortfolio investments are investments made in a group of assets (equity, debt, mutual funds, derivatives or even bitcoins) instead of a single asset with the objective of earning returns that are proportional to the investor's risk profile.read more and realize superior returns. Hence, it is an easy and entertaining read for individual investors with little or no background in behavioural finance. In short, this book can offer you a solid foundation so that you can dive into the fascinating world of investing.

Best takeaway from this book

<< Get this book >>

#5 – Behavioural Finance: Insights Into Irrational Minds and Markets

by James Montier

Behavioural Finance: Insights into Irrational Minds and Markets

The book tends to build a relationship between the financial products available in the market and the theories of behavioral finance, a field of study that has been gaining firm ground during the last few decades.

Book Review

The book conveys the simple belief that the investors in the real world are fundamentally not rational. The author provides many practical examples to explain the various theories of this emerging field of study, which eventually indicate that most of the investment decisions are irrational in nature. It can be useful for the institutional investorsInstitutional InvestorsInstitutional investors are entities that pool money from a variety of investors and individuals to create a large sum that is then handed to investment managers who invest it in a variety of assets, shares, and securities. Banks, NBFCs, mutual funds, pension funds, and hedge funds are all examples.read more for identifying the key psychologically-induced errors and biases in their process and then mitigating them. The fund managers, asset allocators, strategists, corporate financiers, etc. must read this book. It can be equally helpful for students pursuing MBA or other finance and investment-related disciplines.

Best takeaway from this book

  • The book links the financial products available in the market with the theories of behavioral finance.
  • It can be useful for both established investors and aspiring finance professionals.
<< Get this book >>

#6 – Behavioral Finance and Wealth Management

How to Build Optimal PortfoliosOptimal PortfoliosPortfolio optimization refers to the strategic process of making improvements or positive changes to the investor's portfolio containing various assets. The Sharpe ratio helps to analyze the returns from an optimal portfolio.read more That Account for Investor Biases (Wiley Finance)

by Michael M. Pompeian

Behavioral Finance and Wealth Management: How to Build Investment Strategies That Account for Investor Biases

Biases are really your enemy. You don’t want your limited beliefs to act as a hindrance to the right choice you could have made. If so, have a look at the review and the best takeaways.

Book Review

Review: If you would like to pinpoint your biases and want researches to support the statements, this is the right book for you. You would get a lot of information about investment biases, and as you become more aware of them, it would be easier for you to get rid of them. This book is applicable not only for you; rather; it would help you with your clients to identify and correct the flaws of your clients so that you can add tremendous value to them and to their investment decisions.

The best takeaway from this best behavioral finance book

  • The best part of the book is it is very relevant and professionals (who help investors) and people who invest for themselves. It points out all the biases and helps you overcome them.
  • It’s very short, lucid at the same time comprehensive to understand and take action on.
<< Get this book >>

#7 – Behavioral Finance: Psychology, Decision-Making, and Markets

by Lucy Ackert & Richard Deaves

Behavioral Finance: Psychology, decision-making and market

This best behavioral finance book will illustrate three separate things to you in a weaving form – the psychology of investors, how their psychology affects their decision making, and at the same time, how the market gets affected.

Book Review

Review: This behavioral finance book is a great resource for anyone who likes to invest or helps in investing. The reason is this book is a result of a lot of market research and surveys of how things work for retail investorsRetail InvestorsA retail investor is a non-professional individual investor who tends to invest a small sum in the equities, bonds, mutual funds, exchange-traded funds, and other baskets of securities. They often take the services of online or traditional brokerage firms or advisors for investment decision-making.read more, professional managers, traders, analysts, etc. And whatever the authors collected, they presented all the materials in the most structured manner for the consumption of the investors who would like to improve their investment decisions and, as a result, ensure maximum wealth.

Best takeaway from this best behavioral finance book

  • If you need proof of “why” to illustrate what psychology is responsible for the erratic behaviors of investors, you will find all the answers in this book. They are not made up or not the figment of the author’s imagination. They are practical and collected.
  • The materials are structured so very well that you would really be able to use it as a reference book for your class (if you are a student) or for helping any clients grow wealth.
<< Get this book >>

#8 – Behavioral Finance:

Understanding the Social, Cognitive, and Economic Debates (Wiley Finance)

by Edwin Burton & Sunit Shah

Behavioral Finance

This is a big-picture book on much broader aspects of the spectrum. It will talk about the social, economic, and cognitive issues responsible for the psychology of finance.

Book Review

Review: This top behavioral finance book is a great book if you talk about value. But it’s a bit overpriced in terms of only 200 pages long. However, this book does justice to whatever it has mentioned delivering. If we divide the book into useful sections, it would be this – 90 pages on the psychology of finance; and 130 pages on finance & empirical tests done on “value” and “reversal effects.” This book is presented in easy to understand manner, especially for students who are getting bored with classes on behavioral finance.

Best takeaway from this top behavioral finance book

  • You would find a lot of information on an efficient market hypothesis (EMH) and how it evolved, and it also covers anomalies and serial correlation.
  • This can be called an advanced book on behavioral finance without the vanity of language.
<< Get this book >>

#9 – Behavioral Finance and Investor Types:

Managing Behavior to Make Better Investment Decisions (Wiley Finance)

by Michael Pompeian

Behavioral Finance and Investor Types: Managing Behavior to Make Better Investment Decisions

Here the author goes beyond the usual clichés of behavioral finance and looks at it from a completely different perspective.

Book Review

Review: Once you pick up this behavioral finance book, you would learn about four types of investors and how they make decisions. The first type of investor is preservers who preserve wealth rather than taking risks to enhance their wealth. The second kind of investor is followers who take other people’s help to make important investment decisions. The third sort of investors is individualists who are always involved in the financial marketFinancial MarketThe term "financial market" refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more and have an unconventional way of looking at investments. And the last type of investor is those who are called accumulators and who love to accumulate wealth and confidence that they would become successful investors in the near future.

The best takeaway from this top behavioral finance book

  • This behavioral finance book has distilled everything into four types so that the investors can recognize themselves and act accordingly.
  • This book also cites years of academic researches, which would help the average investors make significant decisions about their investments.
<< Get this book >>

#10 – Beyond Greed and Fear:

Understanding Behavioral Finance and the Psychology of Investing (Financial Management Association Survey and Synthesis)

by Hersh Shefrin

Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing (Financial Management Association Survey and Synthesis)

Mistakes push us to fear and more mistakes we make, instead of learning from them, we get into more and more fear. As a result, when some lucrative opportunities come up, we jump in to get in, and greed enters our life. But what if you can go beyond fear and greed! This book will show you how.

Book Review

Review: If you read this behavioral finance book, you would feel entertained, and at the same time, you would learn the nitty-gritty of behavioral finance. According to the book, investors learn slowly and make mistakes along the way. This book will help you curb those mistakes and find out a solution for yourself and for your clients. But in a few places, the author is contradictory, and sometimes, there are just too many words. Overall, a good read for people who are indirectly related to trading (meaning this book is not for a full-time trader but is useful to investors).

Best takeaway from this best book on behavioral finance

  • Three concepts are explained in a great way. They are heuristic biases, the inefficiency of the market, and frame dependence.
  • The author goes into great detail about human behaviors and does justice to his explanations.
<< Get this book >>

#11 – Inefficient Markets:

An Introduction to Behavioural Finance (Clarendon Lectures in Economics)

by Andrei Shleifer

Inefficient Markets: An Introduction to Behavioral Finance (Clarendon Lectures in Economics)

It is original. It is different. And it makes you think about behavioral finance in a new way.

Book Review

Review: This top book on behavioral finance is the most suitable for those who are tired of reading old, rugged pieces of stuff on behavioral finance. This book presents a great way to look at behavioral finance. The author has put a lot of thinking into this book before writing, and the writing reflects that. First, the author describes the foundation of the Efficient Market Hypothesis (EMH)Efficient Market Hypothesis (EMH)The efficient market hypothesis (EMH) states that the stock prices indicate all relevant information and are universally shared, making it impossible for investors to earn above-average returns consistently. Economist Eugene Fama gave the idea of the efficient market hypothesis in the 1960s.read more and then presents his thinking.

Best takeaway from this best book on behavioral finance

  • This book is value for money. If you want to understand the exact psychology behind behavioral finance, this book is for you.
  • This is the best introductory book you would ever find on behavioral finance.
<< Get this book >>

#12 – Personal Benchmark:

Integrating Behavioral Finance and Investment Management

by Charles Widger & Daniel Crosby

Personal Benchmark: Integrating Behavioral Finance and Investment Management

This book can be concentrated in three two letters, PB (Personal Benchmark), BF Behavioral Finance) & IM (Investment Management) and this books details out these three terms in great detail.

Book Review

Review: It is the most personal book on behavioral finance you would ever read. Why? Because in this book, the authors took a different approach to explain risk! Risk is a very personal thing. And no matter how many statistical models we use to quantify risk, the risk would still be very personal. That’s why a personal benchmark is important, and after reading this book, you would be able to integrate three concepts in a single string. That’s why this book is so important to read. Behavioral finance is evolving, and only quantifying statements won’t justify its scope and objective.

Best takeaway from this top book on behavioral finance 

  • This best book on behavioral finance doesn’t only contain all the psychological biases; it also talks about all the tangible solutions for these biases. Thus, readers are able to work on their biases.
  • It’s important to know your emotional direction before you get into the field of investing. And this book will show you how to give your mind an emotional direction to think well before you ever get into the investment field.
<< Get this book >>

#13 – Handbook of Behavioral Finance

by Brian Bruce

By Brian Bruce Handbook of Behavioral Finance (Elgar Original Reference) [Paperback]

This book has been shaped and written so very well. Read the review and the best takeaways to know more.

Book Review

Review: As mentioned, this book is really a handbook of behavioral finance. If you are wondering what this book must be highly technical, you are wrong. This book is not technical; rather, you can say this book presents simple econometricEconometricEconometrics refer to applying economic theories, statistical inference and mathematics for the economic policymaking and forecasting the future trends. It analyzes the historical and real-world data to conduct statistical tests and hypothesis.read more modeling and also discusses experimental, survey, or revealed preference data. Moreover, this book also talks about recent developments in the industry in regards to behavioral finance. Along with that, you would also learn to appreciate the recent researches presented within the premises of the book. In simple terms, if you would read this book, you would sharpen your saw of investment; if not, you may miss something great if you want to get into the investment world anytime soon.

Best takeaway from this top book on behavioral finance

  • This book is comprehensive and a perfect book for beginners. If you are just starting out, you can read this book. This book is lucidly written, and the chapters are short. At the same time, each chapter is weaved in a coherent manner so as to provide the maximum benefit to the readers.
  • If you are a student of finance, this is an un-put-down-able book.
<< Get this book >>

#14 – Advances in Behavioral Finance (Roundtable Series in Behavioral Economics)

by Richard H. Thaler

Advances in Behavioral Finance (Volume 1) (The Roundtable series in behavioral economics)

Leave the trail behind and if you feel that you know enough of behavioral finance, welcome to the advanced world.

Book Review

Review: This book is a nice collection of articles designed to wow its readers. But you need to keep in mind that if you are an average investor, you may not be able to appreciate the value it provides. You need to do your homework before diving into this book. There are loads of statistics, and academic language is used prudently throughout this book. So if you are thinking of reading this book from which you would get multiple perspectives on behavioral finance, you at least need to know the fundamentals of behavioral finance in the first place.

Best takeaway from this book

  • If you are a student of finance, you would be able to appreciate this nice collection.
  • This collection maybe an old one, but it can easily be called a bible for any research scholar who is interested in behavioral finance.
<< Get this book >>

#15 – Advances in Behavioral Finance, Volume II:

(The Roundtable Series in Behavioral Economics)

by Richard H. Thaler

Advances in Behavioral Finance, Volume II (The Roundtable Series in Behavioral Economics)

There was a need for volume two as the first volume was too old. So the editor needed to add the recent developments in this volume.

Book Review

Review: This book is updated from the previous volume, and there are loads of things to learn in this recent volume. People who complained about the sanity of an old paperback would find great value in this book as every recent development is given in this section. However, as it was published in 2005, it still would be considered old if we compare it from the perspective of the present time. This book is recommended for those interested in pursuing higher studies in behavioral finance.

Best takeaway from this book

  • This is very much updated and very much comprehensive, 744 pages long.
  • This book presents twenty recent papers so that you can understand how behavioral finance has evolved over the years. It is not recommended for beginners, but if you want to pursue behavioral finance, this would be an invaluable resource.
<< Get this book >>

Amazon Associate Disclosure

WallStreetMojo is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com