Abstract: Since the human decision behavior are far from the ‘rational’, there are many puzzles can’t be fully explained by the classical modern financial theory which based on rational economists hypothesis. Behavioral finance try to explain financial market by the model which based on human’s real decision behavior. The psychology research thereby becomes one of the foundations of behavioral finance. The achievements of emotion psychology, cognitive psychology and social psychology study, which related to investor’s belief, preferences and decision, have been widely used in behavioral finance research. The further cooperation of two fields, finance and psychology, will promote the academic development of behavioral finance.

Key words: behavioral finance, psychology, rational agent assumption