This paper deals with ideas and elements of behavioral economics and its impact on the efficiency of financial markets. The market has been long dominated by the idea of rational agents acting only to maximize their benefits. However, people are sensual beings, limited in their cognitive abilities and fail to be always so perfectly rational as they would wish. Behavioral economics give a more concrete explanation of the behavior of the investors and their decision-making process from generally recognized standard models of the economy. The paper presents a brief review of the traditional approach to investor behavior, description of the efficient markets hypothesis and overview of the criticism of traditional approach. Behavioral economics is presented through a description of its historical context and its core ideas, among which are highlighted heuristics, biases and prospect theory. Furthermore, anomalies, areas of application and novelties of behavioral economics are explained. The subfield of behavioral economics, which is pointed out and specifically deals with investors' preferences and expectations and the limits of arbitration, is called behavioral finance. Also, factors influencing decision making are presented, the importance of emotions, self-control and risk perception in decision making is explained, as well as the impact of the investment environment. The new theory, a kind of combination of elements of standard and behavioral economics, adaptive markets hypothesis has been introduced. Tha aim of the research is to identify the opportunities offered by behavioral economics as a new approach to observing decision making. The purpose of research is to point out the importance of understanding behavior of participant of financial markets and the changes that behavior triggers.