A study on investors’ personality characteristics and behavioral biases: Conservatism bias and availability bias in the Tehran Stock Exchange

Moradi, Mahmoud; Mostafaei, Zeinab; Meshki, Mehdi

doi:10.5267/j.msl.2013.03.003

Cited by 16 publications

(8 citation statements)

References 9 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…De Bondt & Thaler (1985) dan Moradi, Mostafaei, & Meshki (2013) menjelaskan conservatism sebagai suatu proses mental yang terjadi pada individu, di mana individu lebih memercayai prediksi sebelumnya (prior views) dibandingkan informasi saat ini. Di samping itu, terdapat tendensi individu merasa lebih terbebani untuk mengakui informasi baru yang bertentangan dengan analisisnya.…”

Section: Pendahuluanunclassified

Efek Interaksi Literasi Keuangan Dalam Keputusan Investasi: Pengujian Bias-Bias Psikologi

Wendy

2021

JEBIK

View full text Add to dashboard Cite

This research aims to analyze psychological biases that occur when investors make risky investment decisions. There are five behavioral factors analyzed (herding, overconfidence, disposition effect, conservatism, and availability). Financial literacy is used as moderator in analyzing the effect of those bahaviors towards risky investment decisions. This research examines four econometric equations in explaining financial literacy as a moderator. Interaction effect testing is carried out using moderating variable regression. The results show that psychological biases occur in making risky investment decisions. Herding behavior, overconfidence, disposition effect, and conservatism show a positive effect, while availability does not show a significant effect. Testing on the interaction model finds that financial literacy is able to reduce these psychological biases. This finding also explains the managerial implications that investors with high levels of financial literacy have the potential to experience relatively low psychological biases compared to investors with limited levels of financial literacy. In terms of limitations, this research uses a questionnaire survey that has not been able to reveal aspects of investor behavior in a comprehensive manner. In addition, the number of respondents who are more dominated by beginner investors also adds to the limitations in carrying out the generalization. ABSTRAKRiset ini bertujuan untuk menganalisis bias-bias psikologi yang terjadi ketika pemodal mengambil keputusan investasi berisiko. Terdapat lima faktor perilaku yang dianalisis, yaitu perilaku herding, overconfidence, disposition effect, conservatism, dan availability. Literasi keuangan digunakan sebagai pemoderasi dalam menganalisis pengaruh faktor-faktor keperilakuan tersebut terhadap keputusan investasi berisiko. Riset ini menguji empat persamaan ekonometrika dalam menjelaskan peran literasi keuangan sebagai pemoderasi. Pengujian efek interaksi dilakukan dengan menggunakan regresi variabel moderasi. Hasil analisis menunjukkan bahwa bias-bias psikologi terjadi dalam pengambilan keputusan investasi berisiko. Perilaku herding, overconfidence, disposition effect, dan conservatism menunjukkan pengaruh positif terhadap pengambilan keputusan investasi berisiko, sementara bias availability tidak menunjukkan pengaruh yang bermakna dalam riset ini. Pengujian pada model interaksi menemukan bahwa literasi keuangan mampu mereduksi bias-bias psikologi tersebut. Temuan ini sekaligus menjelaskan implikasi manajerial bahwa pemodal dengan tingkat literasi keuangan yang baik berpotensi mengalami bias-bias psikologi yang relatif lebih rendah dibandingkan pemodal dengan tingkat lietrasi keuangan yang terbatas. Dari sisi keterbatasan, riset ini menggunakan survei kuesioner yang belum mampu mengungkap aspek perilaku pemodal secara komprehensif. Selain itu, jumlah responden yang lebih didominasi oleh pemodal pemula juga menambah keterbatasan dalam melakukan generalisasi hasil penelitian.

show abstract

Section: Pendahuluanunclassified

Efek Interaksi Literasi Keuangan Dalam Keputusan Investasi: Pengujian Bias-Bias Psikologi

Wendy

2021

JEBIK

View full text Add to dashboard Cite

show abstract

“…This study is focused on the role of individual differences in personality traits in investor behavior, as increasing number of authors proved that personality traits influence portfolio selection [Hunter, Kemp, 2004], investors' risk attitude [Sultana, Pardhasaradhi, 2010] and investors' financial outcomes [Moradi et al, 2013]. There is also considerable research on the relationship between personality traits and susceptibility to behavioral biases among stock market investors [Baddelley et al, 2010[Baddelley et al, , 2013Belcher, 2010;Sadi et al, 2011].…”

Section: Introductionmentioning

confidence: 99%

Personality Traits and Susceptibility to Behavioral Biases among a Sample of Polish Stock Market Investors

Rzeszutek

2015

International Journal of Management and Economics

View full text Add to dashboard Cite

The aim of this paper is to investigate whether susceptibility to selected behavioral biases (overconfidence, mental accounting and sunk-cost fallacy) is correlated with the Eysenck's [1978] personality traits (impulsivity, venturesomeness, and empathy). This study was conducted on a sample of 90 retail investors frequently investing on the Warsaw Stock Exchange. Participants filled out a survey made up of two parts: 1) three situational exercises, which assessed susceptibility to behavioral biases and 2) an Impulsiveness Questionnaire, which measures impulsivity, venturesomeness, and empathy. The results demonstrated the relationship between venturesomeness and susceptibility to all behavioral biases explored in this study. We find that higher level of venturesomeness was linked with a lower probability of all behavioral biases included in this study.

show abstract

“…Hibbert, et al (2008) show that negative effect of contemporaneous return on stocks' current implied volatility can also be explained by criteria of representativeness, affect and extrapolation bias rather than leverage or volatility feedback hypothesis only. With the Tehran Stock Exchange trading data, Moradi et al (2013) find significant correlation between personality types: sensation -intuition, judgment-perceptual and conservatism, and introversion -extraversion and availability bias. Northcraft and Neale (1987) and Bucchianeri and Minson (2013) show that appraised values by different agents are positively related to different anchors or asking prices for the same information on real estate property.…”

Section: Traders' Psychologymentioning

confidence: 90%

Stocks’ pricing dynamics and behavioral finance: A review

Sinha¹

2015

10.5267/j.msl

View full text Add to dashboard Cite

In a brief review of the literature on stocks' pricing, the study shows that information vis-à-vis noise serves critical roles in the equilibrium process. It is dynamic in nature and there are different infiltrating aspects from the standard finance to behavioral finance points of views. The aspects of market efficiency, fundamental risk, noise traders' risk, and implementation costs make the stock markets noisy and thereby, limit the arbitrage opportunity of informed traders. Investors' psychological bases viz., belief and preferences contribute more in the equilibrium process. Beliefs include representativeness, conservativeness, and anchoring, availability biases, optimism and wishful thinking, overconfidence, and herd behavior tendency on the part of the investors. On the preferences, investors are influenced by disposition effect, prospects based on reference points, mental accounting, ambiguity aversion, and self control.The study explores the empirical literature also and reviews the six puzzles in the standard finance. Finally, the work identifies a few research gaps to be addressed in the literature.Growing Science Ltd. All rights reserved. 5

show abstract

A study on investors’ personality characteristics and behavioral biases: Conservatism bias and availability bias in the Tehran Stock Exchange

Cited by 16 publications

References 9 publications

Efek Interaksi Literasi Keuangan Dalam Keputusan Investasi: Pengujian Bias-Bias Psikologi

Efek Interaksi Literasi Keuangan Dalam Keputusan Investasi: Pengujian Bias-Bias Psikologi

Personality Traits and Susceptibility to Behavioral Biases among a Sample of Polish Stock Market Investors

Stocks’ pricing dynamics and behavioral finance: A review

Contact Info

Product

Resources

About