The field of behavioral finance uses a broad social science perspective to study the behavior of financial markets. Methods that originate in psychology are used as research tools, along with traditional finance research methods. The research methods in finance most in use before the advent of behavioral finance did not then seem to lend themselves to the application of psychology. Models of individual optimization were almost exclusively based on the assumption of perfectly rational individual behavior. Many of the predictions of these models were described as representing the notion that financial markets were “efficient,” that is, that prices in financial markets accurately incorporate all publicly available information. Studies of the efficiency of financial markets often reported apparent contradictions of efficient markets in the literature, but, before the development of the theory of behavioral finance, their results were hard to interpret, there being at that time no well-delineated alternative hypothesis to compare with the efficient markets hypothesis.