Analysis of components affecting the investment decisions of individuals and firms in behavioral economics in a rationality perspective

Mainstream economic doctrine, accepts people as rational beings who act in their own interests and maximize their utility. Along with the neoclassical paradigm, the foundations of microeconomics were also based on rationalism, thus creating a mathematically understandable discipline. But over time, macro-economic models, such as rational expectations and the effective market hypothesis, have been insufficient to explain economic activity. Alternative economic approaches have been developed that explain that a person who is considered rational in essence is actually affected by a number of cognitive and emotional factors. With the advances in psychology, it has been understood that people have cognitive biases and make their decisions under certain constraints. Emotions such as sympathy, jun, conscience, pain have become increasingly important to explain how human behavior affects economic decisions based on psychology. By the emergence of behavioral economics, experimental studies have proven that individuals can make irrational decisions and that there are cognitive elements that affect these decisions. For this purpose, psychological and cognitive trends in investment decisions of individuals and firms were investigated on the basis of behavioral economics. Thus, a semi-structured interview was conducted with the companies and a survey was conducted with the individuals. Using qualitative methods on an institutional basis and empirical methods on an individual basis, the power of statistical and descriptive results to represent real life has been increased. With the results obtained, the rationality structure of the factors affecting investment profits was analyzed in detail.