Behavioral Finance Theory In The Framework Of The Behavior Of Chinese Stock Market Investors

Since the 80's, as the study of modern classical theory was done deeply, more and more inconsistencies were diclosed ,which were different from explaination of modern classical theory,we call it"anomalies". Behavioral finance theory foucus on investors how to have cognitive bias. Several studies shows, the cognitive bias and less than perfectly rational of investors lead to stock price was abnormal. So the research of behavioral finance theory is the starting point of developing capital market at the deep level. In this sense, provides a good research perspective and tool to us. As a result, the instruduction of behavioral finance theory in chinese stock martket have real meaning to the government and the trader.At the framework of behavioral finance theory, the total chinese stock market is studied as a object in this paper. The paper refers to foreign behavioral finance theory achivement, and studies herd behavior that is the application in the part of the stock market. This paper includes five parts; the first part is introduction, it describes research background, research significance, research methodology and the main content. The second part is a comprehensive exposition about behavioral finance theory, it shows the development process of behavioral finance theory and current situation in the foreign and internal field, and it summrizes theoretical roots of the theory. The third part is a comprehensive exposition about herd behavior theory, it divides this chapter into four parts: herd behavior and its character, internal and foreign empirical research , empirical research and the influence to the stock martket. And the fourth section is empirical research , the main method are CH and CASD, so the result is that herd behavior occurred in chinese stock market. The last part is conclusion and signification.