The authors analyze
the influence of several behavioral features, inherent to agents on the financial
market, on the life-cycle of a financial bubble. In the paper the authors
propose a financial bubble model that takes into account such behavioral
phenomena as herd behavior, irrationality of expectations, and bounded
analytical abilities of investors.
Keywords: behavioral factors, herd behavior, irrationality of
expectations, conservative investors, speculative investors, noise traders,
simulation analysis.