Behavioral finance is a new field that looks at how personal, social, and psychological factors influence how people make financial decisions. It combines psychology, sociology, and finance to explain why people sometimes act irrationally when it comes to money. Traditional finance theories assume people always make rational decisions, but behavioral finance shows that's not always the case. By studying these factors, researchers have found that standard finance theories can't explain all the anomalies in the stock market, leading to the development of behavioral finance.