scholarly journals CEO emotional bias and investment decision Bayesian Network method

2012 ◽  
Vol 9 (2) ◽  
pp. 239-256 ◽  
Author(s):  
Mohamed Ali Azouzi ◽  
Anis Jarboui
Keyword(s):  
Bayesian Network ◽  
Loss Aversion ◽  
Investment Decision ◽  
Investment Decisions ◽  
Behavioral Analysis ◽  
Central Hypothesis ◽  
Network Method ◽  
Emotional Bias ◽  
Investment Choices ◽  
Behavioral Perspective

This research examines the determinants of firms’ investment introducing a behavioral perspective that has received little attention in corporate finance literature. The following central hypothesis emerges from a set of recently developed theories: Investment decisions are influenced not only by their fundamentals but also depend on different factors. One factor is the biasness of any CEO to their investment, biasness depends on the cognition and emotions, because some leaders use them as heuristic for the investment decision instead of fundamentals. Keeping this in view, this paper shows how CEO emotional bias (optimism, loss aversion and overconfidence) effects the investment decisions. I will use Bayesian Network Method to examine this relation. Emotional bias has been measured by means of a questionnaire comprising several items. As for the selected sample, it has been composed of some100 Tunisian executives. Our results have revealed that the behavioral analysis of investment decision implies leader affected by behavioral biases (optimism, loss aversion, and overconfidence) adjusts its investment choices based on their ability to assess alternatives (optimism and overconfidence) and risk perception (loss aversion) to create of shareholder value and ensure its place at the head of the management team.

scholarly journals CEO emotional bias and investment decision, Bayesian network method

2012 ◽  
Vol 2 (4) ◽  
pp. 1259-1278 ◽  
Author(s):  
Mohammad Ali Azouzi ◽  
Jarboui Anis
Keyword(s):  
Bayesian Network ◽  
Investment Decision ◽  
Network Method ◽  
Emotional Bias

scholarly journals Effect of Emotional Biases on Investor’s Decision Making in Nigeria

2020 ◽  
Vol 4 (1) ◽  
pp. 33-39
Author(s):  
Ebenezer Y. Akinkoye ◽  
Oluwaseun E. Bankole
Keyword(s):  
Decision Making ◽  
Loss Aversion ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Primary Data ◽  
Investment Decision Making ◽  
Regret Aversion ◽  
Overconfidence Bias ◽  
Structured Questionnaire

The study examined emotional biases and its effect on investor’s decision making in Nigeria Primary data were employed and the population consists of clients of the top 10 stockbroking firms registered by the Nigerian Stock Exchange as at 31st January, 2018. These firms were selected because they contributed to 68.72% of total value of transactions as at 31st January, 2018. Data on emotional biases and investment decision making among investors in Nigeria were obtained through structured questionnaire which was administered to 30 clients of each stockbroking firm, totalling 300. Data analysis was done using percentages and logistic regression analysis. Findings showed that emotional biases, represented by loss-aversion bias, overconfidence bias, regret-aversion bias and herding bias were prevalent to Nigerian investors and also significantly influenced investor’s decision making in Nigeria. The study suggests that investors should improve the understanding of various emotional biases and traits exhibited by them, adopt a suitable decision technique to avoid this and seek experts’ opinion when making investment decisions.

Herding and loss aversion in stock markets: mediating role of fear of missing out (FOMO) in retail investors

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shilpi Gupta ◽  
Monica Shrivastava
Keyword(s):  
Loss Aversion ◽  
Investment Decision ◽  
Investment Decisions ◽  
Herd Behavior ◽  
Content Type ◽  
Fear Of Missing Out ◽  
Mediating Role ◽  
Retail Investors ◽  
The Impact

PurposeThe study aims to understand the impact of loss aversion and herding on investment decision of retail investors. The study further evaluates the mediating role of fear of missing out (FOMO) in retail investors on these relationships.Design/methodology/approachThe study employed questionnaire survey to collect data from retail investors of Indian stock market. Total 323 data were collected. The collected data were examined using SmartPLS. Factor analysis and partial least square structural equation modeling were employed for fulfilling the objectives of the study.FindingsThe results of the study revealed that investment decisions of retail investors are significantly influenced by loss aversion, herd behavior as well as FOMO. Assessing the impact of herd behavior and loss aversion on investment decision in presence and absence of FOMO exposed that FOMO partially mediates these relations. The mediation was complementary in nature as the presence of FOMO increased the influence of loss aversion and herd behavior on retail investor's investment decisions.Practical implicationsBehavioral predispositions are accountable for numerous irregularities in stock markets. Thus, it is quite substantial to realize the stimulus of these partialities on investment decisions. The outcomes of this study would help financial planners and investors to keep in mind the different ways their decision outcomes could be biased and try to ignore them.Originality/valueThough there have been many studies conducted on behavioral biases and their impact on investment decisions, there are very few studies that have taken into account the FOMO factor in investment, in context of the behavioral biases. Theoretically, FOMO has been linked with herd behavior and greed of earning more, but there are very few empirical supports to this fact. Thus, this study is an attempt to fill this gap by examining the role of FOMO on investment decisions and the different biases associated with it.

The Impact of Financial Advice Certification on Investment Choices

2017 ◽  
Vol 28 (1) ◽  
pp. 129-139 ◽  
Author(s):  
Michael A. Guillemette ◽  
Jesse B. Jurgenson
Keyword(s):  
Low Income ◽  
Consumer Choice ◽  
Choice Behavior ◽  
Investment Decision ◽  
Investment Decisions ◽  
Expected Value ◽  
Investment Decision Making ◽  
Investment Advice ◽  
The Impact ◽  
Investment Choices

The purpose of this study is to investigate whether a professional designation affects consumer choice behavior within the area of investment decision making. Forty-six participants were endowed with real money and received hypothetical investment advice from a certified financial planner (CFP) Professional and a stockbroker. Among low-income households, advice from a CFP altered investor choice behavior within hypothetical education and retirement savings accounts. When participants made investment decisions using education funds and received advice from a CFP, the mean expected value of their investment choices was $43,913, compared to $25,870 given advice from a stockbroker. When investment decisions were made using retirement funds, the average expected value given advice from a CFP and a stockbroker was $53,424 and $33,207, respectively. If an investor was risk-neutral or risk-seeking, investment choices were improved when advice was rendered by a CFP relative to a stockbroker.

scholarly journals INVESTOR BEHAVIOR IN DETERMINING INVESTMENT ON REAL ASSET

2019 ◽  
Vol 9 (2) ◽  
pp. 327
Author(s):  
Yuniningsih Yuniningsih ◽  
Muhamad Taufiq
Keyword(s):  
Loss Aversion ◽  
Psychological Factors ◽  
Structural Equation ◽  
Investment Decision ◽  
Investment Decisions ◽  
Equation Model ◽  
Investor Behavior ◽  
Illusion Of Control ◽  
Positive Direction ◽  
Regret Aversion

Behavior in determining investment is influenced by factors from the fundamental side or individual psychology. This study aims to determine how psychological factors influence investor behavior in determining future investments. This research is a field experimental study using questionnaire data. The variables used in investment decision making include loss aversion, regret aversion and illusion of control bias with 15 total indicators. The sample is an investor in the real asset field and the data is processed using the Structural Equation Model (SEM) with the AMOS program. The results showed that psychological factors both loss aversion and illusion of control bias had a significant effect on investment decisions in a positive direction. While regret aversion has a significant effect with negative direction with investment decisions. Novelty in this study, that psychological factors in behavior finance not only affect securities investors but also real asset investors. 

scholarly journals The Effect of Religiosity Moderation with Loss Aversion on the Investment Decision of Personal Investors Kind of Stock Security in Padang City

2020 ◽  
Vol 4 (1) ◽  
pp. 40-55
Author(s):  
Syailendra Eka Saputra ◽  
Rizky Natassia ◽  
Hayu Yolanda Utami
Keyword(s):  
Hypothesis Testing ◽  
Significant Influence ◽  
Loss Aversion ◽  
Analytical Method ◽  
Investment Decision ◽  
Investment Decisions ◽  
Individual Investors ◽  
Test Results ◽  
Testing Phase ◽  
Stock Type

This study aims to determine the effect of the value of religiosity that moderates loss aversion on investment decisions taken by individual investors in investing in stock type securities. The study was conducted on 120 individual investors who were chosen at random. The analytical method used is to use moderation analysis which is processed using Smart PLS. The test results found that religiosity does not affect the investment decisions of individual investors on stock type securities, while the loss aversion affects the investment decisions of individual investors on stock type securities. During the hypothesis-testing phase, it was proven that religiosity moderation with loss aversion had a negative and significant influence on the investment decisions of individual investors in the securities of shares in Padang.

Pengaruh keputusan investasi, keputusan pendanaan, dan kebijakan dividen terhadap nilai perusahaan yang terdaftar di Bursa Efek Indonesia

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Dina Patrisia ◽  
Muthia Roza Linda ◽  
Ursa Yulianti
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Secondary Data ◽  
Sampling Technique ◽  
Total Sample ◽  
Manufacturing Companies ◽  
Positive Direction ◽  
Company Value

This study aims to analyze the effect of investment decisions, funding decisions, and dividend policy on the value of the company. This research is classified as causative research. The populations in this study are all Manufacturing companies listed on the Stock Exchange in 2012-2016. The sampling technique in this study is using purposive sampling technique with a total sample of 213 samples. The data used is secondary data. The data analysis method used is multiple regression. The results showed that investment decision variables affect the value of the company in a positive direction, funding decisions affect the value of the company in a negative direction, and dividend policy affects the value of the company with a positive direction on Manufacturing companies listed on the IDX. With this research, it is expected that researchers who can further conduct research related to factors that influence the value of the company whose impact is higher than what researchers have met. By using different proxy and data processing methods to produce more accurate data processingKeywords: Investment decisions; funding decisions; dividend policy; company value

PENGARUH GOOD CORPORATE GOVERNANCE (GCG) MAKRO EKONOMI SIZE TERHADAP INVESTMENT DECISION DAN VALUE OF THE FIRM DENGAN PROFITABILITAS SEBAGAI VARIBEL INTERVENING SERTA FINANCING DECISION SEBAGAI VARIABLE MODERATING (Studi Pada Perusahaan Jasan Konstruksi BUMN Yang Listed Di PT Bursa Efek Indonesia)

2019 ◽  
Vol 4 (2) ◽  
Author(s):  
Sugiarto Sugiarto
Keyword(s):  
Corporate Governance ◽  
Investment Decision ◽  
Investment Decisions ◽  
Partial Least Square ◽  
Least Square ◽  
Moderator Variable ◽  
Corporate Values ◽  
Good Corporate Governance ◽  
Financial Decision ◽  
Significant Size

The purpose of this study is to analyze variables that related to investment decisions and corporate values of companies which listed at Bursa Efek Indonesia. Samples of this research are; (1) PT. Adhi Karya (Persero) Tbk, (2) PT. Pembangunan Perumahan (Persero) Tbk, (3) PT. Waskita Karya (Persero) Tbk, (4) PT. Wijaya Karya (Persero) Tbk, selected by purposive sampling. Analysis of this research using Partial Least Square (PLS). The results show that the effect Good Corporate Governance (GCG) on profitability, investment decision and value of the firm is significant, Macro Economy to profitability is not significant, Macro Economy to investment decision and value of the firm is significant, Size to profitability and value of the firm is significant, Size to investment decision is not significant. Profitability to investment decision and value of the firm is significant. Investment decision to value of the firm is significant. Financial decision as a moderator variable on profitability linkage to investment decision is not significant. Financial decision as a moderator variable on profitability linkage to the value of the firm is significant. Financial decision on investment decision and value of the firm is significant.

A Resamping Approach for Customer Gender Prediction Based on E-Commerce Data

2017 ◽  
Vol 3 (1) ◽  
pp. 76 ◽  
Author(s):  
Duong Tran Duc ◽  
Pham Bao Son ◽  
Tan Hanh ◽  
Le Truong Thien
Keyword(s):  
Data Mining ◽  
Bayesian Network ◽  
Web Applications ◽  
Service Providers ◽  
Main Idea ◽  
Classification Methods ◽  
Cost Sensitive Learning ◽  
Network Method ◽  
Demographic Attributes ◽  
Privacy Issues

Demographic attributes of customers such as gender, age, etc. provide the important information for e-commerce service providers in marketing, personalization of web applications. However, the online customers often do not provide this kind of information due to the privacy issues and other reasons. In this paper, we proposed a method for predicting the gender of customers based on their catalog viewing data on e-commerce systems, such as the date and time of access, the products viewed, etc. The main idea is that we extract the features from catalog viewing information and employ the classification methods to predict the gender of the viewers. The experiments were conducted on the datasets provided by the PAKDD’15 Data Mining Competition and obtained the promising results with a simple feature design, especially with the Bayesian Network method along with other supporting techniques such as resampling, cost-sensitive learning, boosting etc.

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