A great story in The (Mis)Behavior of Markets from Benoit Mandlebrot shines a floodlight on how broad the opportunities in Behavioral Arbitrage can be. Evidently Warren Buffet once poked fun that he would like to fund even more university chairs in the classic Efficient Market Hypothesis, so they could train and send out even more mis-guided decision makers- whose money he could then proceed to take!
Like any classical behavioral bias, a prevalent theory, particularly when it is a simplification of human behavior as Efficient Markets theory does, yet which becomes entrenched, dramatically shapes large group behaviors. And in turn, this creates opportunities for those who can detect and design counter positions.
Our work in Behavioral Arbitrage, looking where deepset biases are in play, and developing ways to improve performance around them also applies of course to the financial markets. Now if we could just capture more of Warren Buffett's intuitions!