Name: Roshan Sharma , Sante Pranav Sainath
Country: India

Year: 2022
Volume: Volume-9, Issue-2 (July-December)
Page Number: 61-71

This study explores the integration of rationality and behavioral biases in financial decision making, addressing the limitations of traditional economic models that assume fully rational investors. By synthesizing insights from behavioral finance, psychology, and decision theory, the paper develops a comprehensive framework that explains how cognitive biases, emotional influences, and bounded rationality shape financial behavior. The study highlights that heuristics such as overconfidence, loss aversion, and anchoring are not merely irrational deviations but adaptive responses to complex and uncertain environments. Furthermore, the interaction between intuitive and analytical thinking processes is examined to understand how decisions vary across different contexts. The inclusion of a conceptual trend analysis (2015–2021) further demonstrates the shifting balance between rational and behavioral influences, particularly during periods of uncertainty. The findings emphasize the need for a
hybrid approach that combines rational models with behavioral insights to enhance decision making effectiveness. This integrated perspective has significant implications for investors, financial institutions, and policymakers aiming to improve financial outcomes and promote sustainable investment practices.