The emotional finance theory was developed as an alternative to the mainstream theories which claim that markets are driven by
investors’ conscious processes. Based on psychoanalysis, it searches the role of both conscious and unconscious processes in investment
decisions. It offers new explanations regarding the causes and forecasting of the crises and bubbles that have been experienced frequently
especially since the 2000s. In this framework, it makes use of concepts such as narrative, group feel, states of mind, and phantastic
object, which have not been previously included in finance studies to date. This study represents the most comprehensive literature
study carried out in the field of emotional finance to date. It analyses and models the fundamental components of the theory in the
context of their determinants and effects. It offers findings to help market regulators, fund managers and investors understand the
bubbles that occur in the markets.