aspg-1-834-1792176613 20261016185013 American Scientific Publishing Group admin@americaspg.com American Scientific Publishing Group American Journal of Business and Operations Research AJBOR 2770-0216 2692-2967 2019 0 1 Ahmed Ibrahim Mokhtar Ecole Supérieures Libre des Sciences Commerciales Appliquées, 75019 Paris, France Saad Metawa Mansoura University, Mansoura 35516, Egypt Determining the fair value of financial assets has been a controversial subject since the 1990s, and whether this value depends only on fundamentally calculated pricing models or if there are other psychological factors that affects it. The field of behavioral finance addressed these issues and provided some asset pricing models that incorporate behavioral aspects of decision-making and explained the different heuristics and biases behind these market reactions that lacked fundamental explanation. Behavioral finance is a relatively new paradigm that emerged to try to fill in the gaps in "Modern Finance". Behavioral finance models did not develop specific strategies to beat the market, however, it has highlighted lots of argumentative ideas that have promising directions of further research and analysis that may be very useful in public policy and welfare analysis, as well as in wealth management. In this paper, the author is presenting some of these behavioral finance theories and how they tackle the psychological aspects in investors’ rational and irrational investment decisions. 2019 08 22 834 https://creativecommons.org/licenses/by/4.0/ 10.54216/AJBOR.000101 https://americaspg.com/journal/1/article/834 https://americaspg.com/storage/articles/manuscripts/01KTPAYWH9FBSWRCTRYJP6TBMV.pdf