Truth is that markets are created by people who buy and sell. These people are just like you and me. They might be smarter than us but the truth is that most of them are not. Most of their actions can be based on something that is not totally rational. This leads to importance of understanding psychology and behavioural finance.
If you wish to take advantage of irrational short term market movements it is very helpful to understand how people behave and are likely to react to various situations. Even if you are only buying undervalued companies there are psychological factors behind those reasons why it is undervalued.
Following link contains huge amounts of information as what different ideas are part of BF. There are included plenty of links to papers and studies concerning those subjects.
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Inflation is taxation without legislation. ~Milton Friedman