Behavioural biases affecting investors’ decision-making process: a scale development approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jinesh Jain ◽  
Nidhi Walia ◽  
Manpreet Kaur ◽  
Simarjeet Singh
Keyword(s):  
Decision Making ◽  
Scale Development ◽  
Sampling Technique ◽  
Decision Making Process ◽  
Snowball Sampling ◽  
Behavioural Finance ◽  
Content Type ◽  
Multi Stage ◽  
Market Factors ◽  
Development Approach

Purpose The advocates of behavioural finance have denounced the existing literature on investors’ rationality in the decision-making process and questioned the existence of efficient markets and rational investors. Although diversified research has been conducted in the area of behavioural finance, yet there is a need of further explorations into the field as the available knowledge base is confined to one or a few behavioural biases confronted by investors while making investment decisions. Hence, this study aims to develop a comprehensive, reliable and valid scale to measure the behavioural biases affecting investors’ decision-making process. Design/methodology/approach To develop a comprehensive, reliable and valid scale for measuring the behavioural biases affecting investors’ decision-making process, rigorous multi-stage scale development methodology has been followed. Stage one started with an extensive review of the literature followed by interviews from experienced stockbrokers to clarify construct and getting novel insights about dimensions of behavioural biases. In stage two, 52 items measuring the dimensions of behavioural biases were generated and got evaluated from panel of judges. Pilot testing was done in the third stage which gave a set of 39 items. Finally, in fourth stage, data were collected from 332 individual equity investors on a 7-point Likert scale using the snowball sampling technique. Findings The results of the study highlighted that behavioural biases is a multidimensional phenomenon that significantly affects investors’ decisions and has different dimensions, namely, Availability Bias, Representativeness Bias, Overconfidence Bias, Market Factors, Herding, Anchoring, Mental Accounting, Regret Aversion, Gamblers’ Fallacy and Loss Aversion. The present research has developed a comprehensive, reliable and valid scale for measuring behavioural biases affecting equity investors’ decision-making process. Originality/value Behavioural finance is an emerging area in the field of research particularly in the Indian context which needs further exploration. The present research concentrates on rendering an empirically tested scale to the researchers for measuring the behavioural biases and its impact on investor’s decision-making. Such an instrument can contribute to making progress in the area of behavioural finance and other research studies may also find it useful to achieve their goals.

Webrooming and showrooming: a multi-stage consumer decision process

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Srabanti Mukherjee ◽  
Swagato Chatterjee
Keyword(s):  
Decision Making ◽  
Information Search ◽  
Structural Equation ◽  
Product Type ◽  
Equation Modeling ◽  
Purchase Decision ◽  
Decision Making Process ◽  
Content Type ◽  
Channel Choice ◽  
Multi Stage

PurposeThe purpose of this research is to propose and validate a theoretical framework explaining web-rooming and showrooming as a multi-stage decision-making process. The authors have used consumer purchase decision-making theories to propose a model that identifies showrooming and webrooming as a combination of two decisions, channel choice during information search and channel choice during actual purchase. Further, the authors explored how various antecedents of showrooming and webrooming have differential effects on various stages of a purchase decision-making process and how product type moderates the relationships.Design/methodology/approachThe authors have conducted empirical research, whereby 243 responses were obtained from a cross-sectional survey. The authors have used structural equation modeling and multiple regression analysis to validate our theoretical model.FindingsWebrooming or showrooming is a multi-stage decision-making process for the consumers. First, consumers decide whether to search online or offline and then whether to buy online and offline. Different individual, purchase context-related and channel related factors impact these decisions. Product type governs which variables will be more important than others.Originality/valueThe research looks to enhance the understanding of the consumer's decision-making process during showrooming and webrooming while also helping retailers design and implement appropriate strategies that could affect consumers during information search and actual purchase.

scholarly journals Preliminary look at the motivators and decision-making process of medical tourists from Nigeria to India

2019 ◽  
Vol 27 (1) ◽  
pp. 41-61 ◽  
Author(s):  
Babatunde Abiodun Balogun
Keyword(s):  
Decision Making ◽  
Customer Service ◽  
Medical Tourism ◽  
Health Workers ◽  
Sampling Technique ◽  
Decision Making Process ◽  
Content Type ◽  
Progressive Growth ◽  
Mind Set ◽  
Medical Infrastructure

Purpose The past decade has witnessed a tremendous and progressive growth in the number of Nigerians who engage in medical tourism from Nigeria to India. Various commentators have advanced diverse reasons for this trend. However, there is a dearth of research that has sought to provide empirical insights. This paper aims to investigate the decision-making process of Nigerian medical tourists and why they prefer medical tourism to India to medical care locally. Design/methodology/approach Eight Nigerian medical tourists are interviewed on a one-on-one basis with open-ended questions using purposive criterion sampling technique from an interpretivist mind-set. Findings The paper identifies two major motivators, namely, inadequate medical infrastructure and poor medical, and customer service from health workers in Nigeria, which spurred medical tourism from Nigeria to India. Further, it finds that first timers premise their decisions on advice from reference groups, while previous personal experiences guide decisions on subsequent medical travels. Findings are explained using the template provided by the theory of planned behaviour. Originality/value This exploratory nature of this research provides a useful basis to elucidate the course of decision-making of Nigerian patients so that appropriate marketing communication channels can be applied. It improves the process of recruiting and engaging Nigerian patients and nurturing wholesome relationships between Nigerian patients and hospitals.

Why are people trapped in Ponzi and pyramid schemes?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Taofik Hidajat ◽  
Ina Primiana ◽  
Sulaeman Rahman ◽  
Erie Febrian
Keyword(s):  
Design Methodology ◽  
Sampling Technique ◽  
Human Beings ◽  
Snowball Sampling ◽  
Behavioural Finance ◽  
Content Type ◽  
Pyramid Scheme ◽  
Emotional Bias ◽  
Pyramid Schemes ◽  
Snowball Sampling Technique

Purpose This paper aims to identify psychological factors that influence people to be involved in Ponzi and pyramid schemes. Design/methodology/approach A psychological approach to finance or behavioural finance is applied in this research because of the assumption that human beings are not always rational. The sample consisted of 98 investors in 11 cities in Indonesia who were or had invested in an investment program with a Ponzi or pyramid scheme. The snowball sampling technique was applied. Findings The conclusion is that optimism (emotional bias), confirmation bias, representativeness bias, framing bias and overconfidence (cognitive bias) positively influenced investment decisions related to Ponzi and pyramid schemes. Originality/value The novelty aspect of this research is the implementation of a behavioural finance perspective to answer and express the fascinating phenomenon of Ponzi and pyramid investment schemes.

Integrated quality environmental management implementation in food processing SMEs

2019 ◽  
Vol 31 (5) ◽  
pp. 740-757 ◽  
Author(s):  
Syed Ali Raza Shah ◽  
Khairur Rijal Jamaludin ◽  
Hayati Habibah Abdul Talib ◽  
Sha’ri Mohd Yusof
Keyword(s):  
Environmental Management ◽  
Food Processing ◽  
Success Factors ◽  
Process Management ◽  
Empirical Studies ◽  
Sampling Technique ◽  
Developed Countries ◽  
Operational Performance ◽  
Snowball Sampling ◽  
Content Type

Purpose The purpose of this paper is to identify the critical success factors (CSFs) of integrated quality environmental management (IQEM) and analyze their impact on operational performance (OP) and environmental performance (EP) in food processing Small and medium-sized enterprises (SMEs) in Pakistan. Design/methodology/approach The study is based on collecting data using a survey questionnaire through snowball sampling technique. A total of 302 food processing SMEs operating in Punjab, Pakistan, responded to the survey. SPSS version-23 and SmartPLS-3 were used for data analysis. Findings The literature review identified leadership (LS), employee management (EM), strategic planning (SP), information management (IM), process management (PM), supplier management (SM) and customer focus (CF) as CSFs of IQEM. The results of this study found a significant relationship of all identified CSFs with operational performance in food processing SMEs whereas EM, IM, PM and SM were insignificant with the EP in the food processing SMEs. Research limitations/implications Although this study has collected data from one province, the Punjab province, it still relevant in identifying the CSFs for IQEM implementation within food processing SMEs to improve performance. Originality/value Despite the wide spread of integrated systems practices in the developed countries, little attention has been placed to implement and assess the IQEM initiatives by organizations in the developing countries. Thus, this study identified CSFs of IQEM based on empirical studies and analyzed their impact on OP and EP of food processing SMEs.

Measuring intellectual capital in a firm belonging to a strategic alliance

2015 ◽  
Vol 16 (1) ◽  
pp. 174-198 ◽  
Author(s):  
Stefania Veltri ◽  
Andrea Venturelli ◽  
Giovanni Mastroleo
Keyword(s):  
Decision Making ◽  
Expert System ◽  
Intellectual Capital ◽  
Strategic Alliances ◽  
Strategic Alliance ◽  
Empirical Work ◽  
Organizational Level ◽  
Decision Making Process ◽  
Content Type ◽  
Scant Attention

Purpose – The purpose of this paper is to propose a method to measure intellectual capital (IC) in firms involved in strategic alliances, an area that has received scant attention in the literature, as existing research is focused mainly on organizational level mainly and increasingly on macro-level unit such as regions or nations. There are very few works at the meso-level (i.e. alliances, clusters), and the paper aims to fill this void, by providing researchers and practitioners with a tool capable of combining measurement and management aims, developed at organizational level with the active participation of the researchers. Design/methodology/approach – The method of analysis is based on a model formalized through a fuzzy expert system (FES). The FES are able to merge the capabilities of an expert system to simulate the decision-making process with the vagueness typical of human reasoning, maintaining the ability to still have a numeric value as a response. Its construction requires the participation of experts, whose knowledge of the problem is accumulated in the form of blocks of rules. These features make it possible to formalize the decision-making process related to the IC valuation, handling qualitative and quantitative variables, and exploring the cognitive mechanisms underlying this process. Findings – The outcome of the application is a system designed to measure the intangible performance deriving from participation in a strategic alliance using FES. This study contributes to the broadening of the research community’s understanding regarding the alternative measurement of IC created within strategic alliances. Research limitations/implications – To the best of the authors’ knowledge, IC literature lacks methods expressly designed to measure the incremental value of IC originating from collaboration among firms. From a measurement perspective, the results may be regarded as valuable proof that IC performance within strategic alliances can be measured quantitatively. Practical implications – On the management side, the possibility of retracing the determinants of different IC intermediate indicators composing the final IC index allows strategic alliances managers to use this information for decision-making purposes. Originality/value – To the best of the authors’ knowledge this is the first study applying FES to measure IC in a firm belonging to a strategic alliance. In the authors’ opinion, fuzzy logic methodology, recently applied in empirical work designed to evaluate IC, represents a reliable methodology because of the “fuzzy” nature of IC.

Autonomy and Decision-making Ability among Gujjar Women of Kashmir: A Study of Khan Sahib Tehsil in District Budgam

2021 ◽  
Vol 28 (1) ◽  
pp. 90-103
Author(s):  
Wasia Hamid ◽  
Tanveer Ahmad Khan ◽  
Mohmad Saleem Jahangir
Keyword(s):  
Decision Making ◽  
Employment Status ◽  
Sampling Technique ◽  
Decision Making Process ◽  
Kashmir Valley ◽  
Tribal Women ◽  
Size Type ◽  
Women In Decision Making ◽  
Case Study Methods

The present study investigates the level of empowerment among tribal women in terms of their participation in the decision-making process and to identify the factors that affect their level of participation. Fifty women from the Gujjar community of Kashmir Valley were selected through a purposive sampling technique. The interview and case study methods were employed for collecting data from the potential participants. The study revealed that tribal women’s right to make decisions was confined to minor household issues only. A significant positive correlation was also noted between family size, type of family, age, level of education, employment status and participation of the tribal women in decision-making.

A conceptual framework for wisdom-based decision-making process in audit profession

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hoang To Loan Nguyen
Keyword(s):  
Decision Making ◽  
Grounded Theory ◽  
Conceptual Framework ◽  
Research Process ◽  
Decision Making Process ◽  
Ethical Orientation ◽  
Content Type ◽  
External Auditors ◽  
Wise Decision ◽  
Knowledge Assimilation

PurposeWisdom is considered as crucial in decision-making in both management and auditing practice. This research aims to investigate the concept of wisdom in auditing, thereby empirically exploring the determinants of wisdom in audit decision-making and explaining inter-relations among these determinants.Design/methodology/approachThis study employs grounded theory methodology that is based on in-depth interviews with twenty-seven practicing auditors who are audit partners, managers, seniors and assistants of auditing firms. Guided by the grounded theory, data collection and data analyses were conducted simultaneously to look into the new insights of the research phenomenon. The coding process was constantly compared until the research's theoretical saturation is reached after four rounds. At the end of the research process, the study conducted a survey to confirm the proposed framework as well as examine the inter-relationships between the defined determinants.FindingsResults suggest developing a conceptual framework to interpret wisdom-based decision-making process in auditing. A wise process of audit decision-making is defined as an integrated exercise of multiple determinants including knowledge assimilation, judgmental ability and ethical orientation. The research also explains and examines the potential interrelationships among these determinants in the audit decision-making process.Practical implicationsWisdom is a valuable tacit ability for all external auditors. The development of wise decision-making abilities of auditors should be considered an integral part of multiple virtues including knowledge and judgmental and ethical aspects.Originality/valueThe contributions of this study are original and significant because it proposes a new approach to explain for the audit decision-making process and enhances better understandings of the concept of wisdom in auditing practices and its roles in audit decision-making.

Integration between knowledge management and business process management and its impact on the decision making process in the construction sector: a case study of Jordan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sami Wasef Abuezhayeh ◽  
Les Ruddock ◽  
Issa Shehabat
Keyword(s):  
Decision Making ◽  
Knowledge Management ◽  
Business Process Management ◽  
Process Management ◽  
Business Processes ◽  
Decision Makers ◽  
Decision Making Process ◽  
Construction Sector ◽  
Content Type

Purpose The purpose of this paper is to investigate and explain how organizations in the construction sector can enhance their decision-making process (DMP) by practising knowledge management (KM) and business process management (BPM) activities. A conceptual framework is developed that recognises the elements that impact DMP in terms of KM and BPM. The development of this framework goes beyond current empirical work on KM in addition to BPM as it investigates a wider variety of variables that impact DMP. Design/methodology/approach A case study is undertaken in the context of the construction industry in Jordan. A theoretical framework is developed and assessment of the proposed framework was undertaken through a questionnaire survey of decision-makers in the construction sector and expert interviews. Findings The outcomes of this research provide several contributions to aid decision-makers in construction organizations. Growth in the usage of KM and BPM, in addition to the integration between them, can provide employees with task-related knowledge in the organization’s operative business processes, improve process performance, promote core competence and maximise and optimise business performance. Originality/value Through the production of a framework, this study provides a tool to enable improved decision-making. The framework generates a strong operational as well as theoretical approach to the organizational utilization of knowledge and business processes.

Evaluation of barriers in the adoption of halal certification: a fuzzy DEMATEL approach

2019 ◽  
Vol 14 (1) ◽  
pp. 153-174 ◽  
Author(s):  
Shahbaz Khan ◽  
Mohd Imran Khan ◽  
Abid Haleem
Keyword(s):  
Decision Making ◽  
Design Methodology ◽  
Specific Region ◽  
Integrative Approach ◽  
Decision Making Process ◽  
Management Support ◽  
Fuzzy Dematel ◽  
Content Type ◽  
Certification System ◽  
Expert’S Opinion

PurposeHigher level of customer satisfaction for halal products can be achieved by the effective adoption of halal certification through assessment and accreditation (HCAA). There are certain issues that seem detrimental towards the adoption of HCAA. The purpose of this paper is to identify the major barriers towards the adoption of HCAA and evaluate inter-relationships among them for developing the strategies to mitigate these barriers.Design/methodology/approachThe barriers towards the adoption of HCAA are identified through an integrative approach of literature review and expert’s opinion. The inter-relationship among the identified barriers is evaluated using fuzzy-based decision-making trial and evaluation laboratory (fuzzy DEMATEL) technique, which categorises them into influential and influenced group.FindingsThe evaluation of inter-relationship among barriers using fuzzy DEMATEL indicates four influencing barriers and six influenced barriers towards the adoption of HCAA. Further, findings suggest an extensive government, and management support is vital in terms of commitment, resources and actions to realise the benefits attributed with HCAA.Research limitations/implicationsThe inter-relationship among barriers is contextual and based on the perception of experts which may be biased as per their background and area of expertise. This study pertains to a specific region and can be extended to the generalised certification system.Originality/valueThe empirical base of the research provides the inter-relationship among the barriers towards the adoption of HCAA which can be effectively used as input in the decision-making process by producers, manufacturers and distributor. The policy maker can analyse the cause group and effect group of barriers to formulate policies that would help in the adoption of HCAA.

Decision making, distributed leadership and the objective knowledge growth framework

2019 ◽  
Vol 34 (2) ◽  
pp. 217-231
Author(s):  
Stephanie Chitpin
Keyword(s):  
Decision Making ◽  
Distributed Leadership ◽  
School Leaders ◽  
Decision Makers ◽  
Decision Making Process ◽  
Objective Knowledge ◽  
Content Type ◽  
Education Leaders ◽  
Knowledge Growth ◽  
Analytical Approaches

Purpose The purpose of this paper is to know the extent to which a decision-making framework assists in providing holistic, comprehensive descriptions of strategies used by school leaders engaging with distributed leadership practices. The process by which principals and other education leaders interact various school-based actors to arrive at a distributed decision-making process is addressed through this paper. The position taken suggests that leadership does not reside solely with principals or other education leaders, but sustains the view that the actions of various actors within a school setting contribute to fuller and more comprehensive accounts of distributed leadership. Design/methodology/approach While the application of rational/analytical approaches to organizational problems or issues can lead to effective decisions, dilemmas faced by principals are often messy, complex, ill-defined and not easily resolved through algorithmic reason or by the application of rules, as evidenced by the two stories provided by Agnes, a third-year principal in a small countryside elementary school in a small northeastern community, and by John, a novice principal in a suburb of a large Southwestern metropolitan area. Findings The value of the objective knowledge growth framework (OKGF) process is found in its ability to focus Agnes’s attention on things that she may have overlooked, such as options she might have ignored or information that she might have resisted or accepted, as well as innumerable preparations she might have neglected had she not involved all the teachers in her school. Research limitations/implications The implementation of the OKGF may appear, occasionally, to introduce unnecessary points along this route and may not be laboriously applied to all decision-making situations. However, the instinctively pragmatic solutions provided by this framework will often produce effective results. Therefore, in order to reduce potentially irrational outcomes, the systematic approach employed by the OKGF is preferable. The OKGF must be managed, implemented and sustained locally if it is to provide maximum benefits to educational decision makers. Practical implications Given the principals’ changing roles, it is abundantly clear that leadership practice can no longer involve just one person, by necessity, and it is becoming increasingly difficult to imagine how things could have been accomplished otherwise. Expecting the principal to single-handedly lead efforts to improve instruction is impractical, particularly when leadership may be portrayed as what school principals do, especially when other potential sources of leadership have been ignored or treated as secondary or unimportant because that leadership has not emanated from the principal’s office (Spillane, 2006). In this paper, the authors have striven to reveal how a perspective of distributed leadership, when used in conjunction with the objective knowledge growth framework, can be effective in assisting principals in resolving problems of practice. Social implications Different school leaders of varying status within the educative organization benefit from obtaining different answers to similar issues, as evidenced by John’s and Agnes’s leadership tangles. Lumby and English (2009) differentiate between “routinization” and “ritualization.” They argue, “They are not the same. The former erases the need for human agency while the latter requires it” (p. 112). The OKGF process, therefore, cannot provide school leaders with the “right” answers to their educative quandaries, simply because any two school leaders, facing the same issues, may utilize differing theories, solutions, choices or options which may satisfy their issues in response to their own individual contextual factors. Similarly, in a busy day or week, school leaders may be inclined to take the shortest distance between two points in the decision-making process; problem identification to problem resolution. Originality/value Should the OKGF process empower decision makers to obtain sound resolutions to their educative issues by assisting them in distancing themselves from emotions or confirmation biases that may distract them from resolving school problems, its use will have been worthwhile.

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