Greed and fear

Fear

Fear is a distressing negative sensation induced by a perceived threat. It is a basic survival mechanism occurring in response to a specific stimulus, such as pain or the threat of danger...

 are supposed, together with herd instinct, to be the three main emotional motivators

Motivation

Motivation is the driving force by which humans achieve their goals. Motivation is said to be intrinsic or extrinsic. The term is generally used for humans but it can also be used to describe the causes for animal behavior as well. This article refers to human motivation...

 of stock markets and business behavior, and one of the cause of bull markets, bear markets and business cycle

Business cycle

The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...

s.

From a market saying to an academic research topic

The phrase, traditionally used by traders and market commentators, has become a topic of economic research about investor irrationalities (cognitive and emotional biases). Its effects on market price

Market price

In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics...

s and returns contradict, or at least moderate, the efficient market hypothesis

Efficient market hypothesis

In finance, the efficient-market hypothesis asserts that financial markets are "informationally efficient". That is, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.There are...

.

Here are two examples of approaches:

• How those two alternating emotions work for traders, and how they can distort their decision process, has been the subject of neuroeconomics
  Neuroeconomics
  Neuroeconomics is an interdisciplinary field that seeks to explain human decision making, the ability to process multiple alternatives and to choose an optimal course of action. It studies how economic behavior can shape our understanding of the brain, and how neuroscientific discoveries can...
  
   studies (1). More generally, those researches show some primacy of emotion
  Emotion
  Emotion is a complex psychophysiological experience of an individual's state of mind as interacting with biochemical and environmental influences. In humans, emotion fundamentally involves "physiological arousal, expressive behaviors, and conscious experience." Emotion is associated with mood,...
  
   over cognition in decision making
  Decision making
  Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice.- Overview :Human performance in decision terms...
  
  .
• According to Hersh Shefrin
  Hersh Shefrin
  Hersh Shefrin is an economist best known for his pioneering work in behavioral finance.Shefrin received his B.S. from Manitoba University in 1970. At the University of Waterloo in 1971 he received his M.S. in mathematics. He then obtained a Ph.D...
  
  , one of the key researchers in Behavioral economics, the phrase hope and fear, although less colloquially used, would describe better those alterning excessive expectations by market players (2)