scholarly journals A STUDY OF IMPACT OF PSYCHOLOGICAL BIASES ON INVESTOR’S INVESTMENT DECISION

2021 ◽  
pp. 1-6
Author(s):  
Vijaya A. Tupe
Keyword(s):  
Psychological Factors ◽  
Investment Decision ◽  
Rational Decision ◽  
Behavioural Finance ◽  
Behavioural Factors ◽  
The Impact ◽  
Psychological Bias ◽  
Investor Decisions

The paper examines the impact of psychological biases on investor decisions Investors always make rational decision. He or she collect information about investment and while analyzing investment decision various psychological factors effect on investor’s investment decision. However, investor also influenced by various psychological bias and investor personalities that effect on investment decision. Behavioural finance studies that investor spend time on investment decision while that time he or she influenced by biases. The aim of this paper is to evaluate impact of behavioural factors on investment decision made by investors in Aurangabad city. KEYWORDS: Behavioural Finance, Behavioural Investor types, Psychological Bias.

scholarly journals INVESTMENT DECISION MAKING AMONG GULF INVESTORS: BEHAVIOURAL FINANCE PERSPECTIVE

2017 ◽  
Author(s):  
Bashar Yaser Almansour ◽  
Yaser Ahmad Arabyat
Keyword(s):  
Risk Taking ◽  
Psychological Factors ◽  
Investment Decision ◽  
Investment Decisions ◽  
Behavioural Finance ◽  
Financial Investment ◽  
Investment Decision Making ◽  
Familiarity Bias ◽  
Attribution Bias ◽  
The Impact

The rationality hypothesis has been a very popular topic among the academics. Being a widely accepted hypothesis as part of the traditional finance theories, an investor is deemed a rational agent and makes rational decisions by exhausting all available alternatives. However, recently, new behavioural finance theories have been gaining ground as many empirical findings, which have been left unanswered by the traditional theories, can be explained by these behavioural-approach based theories. This research examined the impact of psychological factors on risk-taking behaviour in investment decisions. In particular, this research considered the possible effects of psychological factors, namely herding, heuristics, prospect, market, self-attribution bias, and familiarity bias, in making investment decisions. The findings in this paper declared that risk-taking behaviour in investment is affected by herding factors, heuristics factors, prospect factors, market factors and self-attribution bias factors. The familiarity bias factors do not significantly affect risk-taking behaviour in financial investment. Keywords: Behavioural finance, Herding, Heuristics, Prospect, Market, Self-attribution bias, Familiarity bias

Behavioural biases in investment decision making – a systematic literature review

2015 ◽  
Vol 7 (1) ◽  
pp. 88-108 ◽  
Author(s):  
Satish Kumar ◽  
Nisha Goyal
Keyword(s):  
Decision Making ◽  
Literature Review ◽  
Empirical Research ◽  
Systematic Literature Review ◽  
Investment Decision ◽  
Future Research ◽  
Behavioural Finance ◽  
Content Type ◽  
Investment Decision Making ◽  
The Impact

Purpose – The purpose of this paper is to systematically review the literature published in past 33 years on behavioural biases in investment decision-making. The paper highlights the major gaps in the existing studies on behavioural biases. It also aims to raise specific questions for future research. Design/methodology/approach – We employ systematic literature review (SLR) method in the present study. The prominence of research is assessed by studying the year of publication, journal of publication, country of study, types of statistical method, citation analysis and content analysis on the literature on behavioural biases. The present study is based on 117 selected articles published in peer- review journals between 1980 and 2013. Findings – Much of the existing literature on behavioural biases indicates the limited research in emerging economies in this area, the dominance of secondary data-based empirical research, the lack of empirical research on individuals who exhibit herd behaviour, the focus on equity in home bias, and indecisive empirical findings on herding bias. Research limitations/implications – This study focuses on individuals’ behavioural biases in investment decision-making. Our aim is to analyse the impact of cognitive biases on trading behaviour, volatility, market returns and portfolio selection. Originality/value – The paper covers a considerable period of time (1980-2013). To the best of authors’ knowledge, this study is the first using systematic literature review method in the area of behavioural finance and also the first to examine a combination of four different biases involved in investment decision-making. This paper will be useful to researchers, academicians and those working in the area of behavioural finance in understanding the impact of behavioural biases on investment decision-making.

scholarly journals Influence of Behavioural Biases on Investment Decision Making in Bhubaneswar Region

2019 ◽  
Vol 8 (3) ◽  
pp. 8297-8301
Keyword(s):  
Decision Making ◽  
Investment Decision ◽  
Descriptive Analysis ◽  
Sampling Technique ◽  
Primary Data ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
Retail Investors ◽  
The Individual ◽  
The Impact

Behavioural Finance has gained a lot more importance in recent era. In the fast moving world where the standard finance fails to explain the irrational behavior of the investors, behavioural finance tries to identify the cause for such behavior which otherwise called as behavioural anomalies. The purpose of this research paper is to identify such anomalies and also to examine whether the behavioural biases has any influence in the investment decision making by the retail investors. This paper also put an emphasis to find out which among the different biases has the most and least influence on the individual investment decision making process. This study has used primary data for knowing the impact of factors such as gender, age, occupation, income, sector preference, and instruments preferred for investments, source of information, intention behind investment and consideration before investment. Descriptive analysis has been done to check the impact of these factors along with correlation and other. The sampling technique used here is non-probabilistic convenience sampling. The data has been collected through structured questionnaire based on five point Likert scale from the retail investors of Bhubaneswar region. This research shall interest the company, policy makers and the issuers of securities about the interest and preferences of individuals before issuing securities in the market.

scholarly journals Role of Behavioral Factors in Share Market Investment Decision Making

2019 ◽  
Vol 8 (12S2) ◽  
pp. 786-796
Keyword(s):  
Decision Making ◽  
Psychological Factors ◽  
Service Providers ◽  
Investment Decision ◽  
Individual Investors ◽  
Special Focus ◽  
Chi Square ◽  
Behavioral Issues ◽  
Investment Decision Making ◽  
The Impact

Investment behavior of individual investors in the share market highly influenced to variety of psychological factors. All the psychological factors highly contribute for investors’ decision of allocating the surplus financial resources for different instruments and stocks in the stock market. Major psychological bias broadly classified as Heuristic Bias, Prospect Bias, Market Bias and Hardening Bias. But, in this study authors concentrated in detail to investigate the impact of Heuristic bias on the investment decision making of Indian share market investors with special focus on the representativeness, over confidence, anchoring, gambler’s fallacy and availability bias. 375 share market investors selected from different geographical areas and different share broking houses to answer structured questionnaire but response received for 310 questionnaires. Also, share broker, financial experts and regular investors informally interviewed to get in-depth knowledge on the issues related for influence of psychology on investment decision of individual investors of share market. Different behavioral variables in this study have been justified on the basis of respondents’ age, gender, geography, kind of investor, recourses for investment, amount for investment etc. Indian share market investment lagging behind just with the participation of not more than 6% of the total population due to several issues, one among is failure of both investor and share service providing agencies to understand the influence of behavioral issues and its impact on investment decision. Final justification in the present empirical paper draw by applying different statistical techniques like chi-square test, factor analysis, co-relation analysis and ANOVA techniques of SPPS 20. This research attempt may be highly helpful for both the investors and financial service providers to reconstruct strategies after considering behavioral issues and its impact on investment.

The Impact of Behavioural Finance on Investment Decision-making: A Study of Selected Investment Banks in Nigeria

2019 ◽  
pp. 097215091985138
Author(s):  
Olubunmi Edward Ogunlusi ◽  
Olalekan Obademi
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Significant Relationship ◽  
Positive Impact ◽  
Investment Decision ◽  
Negative Relationship ◽  
Investment Banks ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
The Impact

In this study, the impact of behavioural finance on investment decision-making using a selected investment banks was investigated. A total of 200 questionnaire items were administered to the respondents of the four surveyed investment banks including Afrinvest West Africa Limited, Meristem Securities, Vetiva Capital and ARM Nigeria Limited, out of which 180 questionnaire items representing 90 per cent were retrieved. The data were analyzed using tables, percentages, correlation and multiple regression analysis. The overall empirical results provided evidence of a positive impact between behavioural finance and investment decision, supporting previous research and contributing to generalization. The other findings of the research are thus: there is a significant relationship between heuristics and individual investment decision; there is a significant relationship between prospect theory and individual investment decision; and lastly there is a strong and negative relationship between heuristics and investment decision. Similarly, the relationship between prospect theory and investment decision is negative and strong. Against the backdrop of the aforementioned findings and conclusion, the following recommendations are proposed to both the institutional and individual investors: investors should be enlightened on the fact that there are many behavioural factors which can affect their investment decision-making process and they should be made aware of these factors including heuristics and prospect theory.

The Role of Behavioural Factors in the Investment Decisions of Household Investors

2017 ◽  
Vol 7 (1) ◽  
pp. 392
Author(s):  
Arumugam Subramaniam ◽  
Thirunavukkarasu Velnampy
Keyword(s):  
Factor Analysis ◽  
Sri Lanka ◽  
Investment Decision ◽  
Investment Decisions ◽  
Northern Province ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
Behavioural Factors ◽  
Investment Process ◽  
Analytical Tools

The process of investment requires investors to take various types of decisions and the quality of those decisions determines the outcomes of the investment process. Standard finance theories and behavioural finance theories present different views on investment decision making based on the concept of rationality. Behavioural finance theories indicate that investors fail to perform in a completely rational manner when making investment decisions due to various biases. The objective of the study is to identify the behavioural finance based factors influence the investment decisions of household investors in the Northern Province of Sri Lanka. The necessary data for the study were collected from 1810 household investors in the Northern Province of Sri Lanka and the sample respondents were selected under Proportionate stratified random sampling method. The analytical tools of exploratory factor analysis and confirmatory factor analysis were used to analyze the data. The current study concluded that Representativeness bias, Overconfidence bias, Availability Bias, Loss Aversion bias, Regret Aversion bias and Herding influence the investment decisions of household investors.

scholarly journals A STUDY ON IMPACT OF BEHAVIOURAL FINANCE ON INVESTMENT DECISION OF SINGLE PARENTS IN SOUTH ASIAN COUNTRIES

2021 ◽  
Vol 6 (2) ◽  
pp. 16-37
Author(s):  
Kannadas Sendilvelu ◽  
Manita Deepak Shah
Keyword(s):  
South Asian ◽  
Risk Taking ◽  
Investment Decision ◽  
Single Parent ◽  
Jel Classification ◽  
Asian Countries ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
The Impact ◽  
Second Chance

The purpose of this study is to find out the possible impact of behavioural finance on the investment decision of a single parent. As being an earning/working single parent who usually does not have other possible sources in their family, the decision which they take must be a reliable one and cannot afford to get a second chance. In the study, this study is also one of an effort to assess the impact of behavioural biases in the investment decision-making of a single parent. A questionnaire is designed and responses are collected from 203 respondents who prefer to invest where the level of risk is either low or moderate and are more concerned about losses in their investment than substantial gain. Also, most of the respondents were investing in order to meet some specific purpose, for their retirement plan as well as to educate their children. This study concludes by stating that investors’ risk-taking capacity is dependent on their level of income and the sources of income. Although every Individual is subject to some biases, they tend to think more rational way than an average investor in many ways as they know about their requirements and the investment they make. JEL Classification Codes: G40, G41.

How to Psychologically Minimize Scratching Impulses

2014 ◽  
Vol 222 (3) ◽  
pp. 140-147 ◽  
Author(s):  
Ariane Sölle ◽  
Theresa Bartholomäus ◽  
Margitta Worm ◽  
Regine Klinger
Keyword(s):  
Cognitive Processes ◽  
Placebo Effect ◽  
Psychological Factors ◽  
Pharmacological Treatments ◽  
Physiological Basis ◽  
Psychological Mechanisms ◽  
Physical Complaints ◽  
Factors Influencing ◽  
The Impact ◽  
Placebo Model

Research in recent years, especially in the analgesic field, has intensively studied the placebo effect and its mechanisms. It has been shown that physical complaints can be efficiently reduced via learning and cognitive processes (conditioning and expectancies). However, despite evidence demonstrating a large variety of physiological similarities between pain and itch, the possible transfer of the analgesic placebo model to itch has not yet been widely discussed in research. This review therefore aims at highlighting potential transfers of placebo mechanisms to itch processes by demonstrating the therapeutic issues in pharmacological treatments for pruritus on a physiological basis and by discussing the impact of psychological mechanisms and psychological factors influencing itch sensations.

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