Analysis On Irrational Of Chinese Stock Market Based On Behavioral Finance

After 10 years development, Chinese stock market has got obvious achievement, but new problems emerged. An outstanding problem of them is that there's obvious irrational characteristic demonstrated in Chinese stock market, which has been one important restricting factor of the development of China's stock market.In the thesis, the principle theories and models of the behavioral finance were reviewed. Based on the theory of behavioral finance, the dissertation study has been done on the irrational characteristic in Chinese stock market. The study of the thesis focuses on the three subjects in Chinese stock market. They are the government, individual investors and institution investors. They could be known as irrational object after the analysis on the behavior of government, individual investors and institution investors. The further study of this thesis focuses on realizing the infection and the effect process of three subjects inside. Their irrational behavior result in that the fluctuation of the stock market is aggravated, there's too much noise trader and irrational bubble in Chinese stock market. And the investment of speculation prevails in the stock market. These make the stock market great weakening in the efficiency of distribution. The irrational of the government, individual investors and institution investors lead to the irrational of the whole stock market.Then it's ready for studying on the mechanism of the stock market of China. Based on the study before of the thesis, some suggestion is got: Adjust the role of the government on the stock market; Get more education to individual investors and perfect individual investors 's protecting mechanism; learn and practice the strategy from behavioral finance.