Decoding Financial Decisions: The Power of EEG in Neurofinance Research

https://doi.org/10.34047/MMR.2024.11212

Abstract

With the application of robust neuroscientific tools in mapping financial decisions, research in Neurofinance has gained increased recognition in recent years. Among all the available neuroimaging tools, EEG has provided considerable evidence that overcomes the drawback associated with traditional self-reported measures. Moreover, despite a rise in EEG-based research, studies in the present academic literature are scattered and confusing. The purpose of the present systematic literature review was to consolidate the existing body of knowledge and to make it simpler for other researchers to locate pertinent studies. After a thorough analysis of the literature over 12 years; two key themes have been identified- risky decision-making and portfolio strategies. Additionally, it has been found that the majority of studies were conducted in a lab setting with simulated market conditions. Finally, we also presented prospects for the suitability of EEG in different aspects of financial decisions for the immediate identification of errors.