Behavioral Biases of Individual Investors: The Effect of Anchoring

Zaiane, Salma

doi:10.15604/ejss.2015.03.01.002

Cited by 7 publications

(7 citation statements)

References 24 publications

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“…І, мабуть, найбажаніший для держави ефект, якого можна досягнути відносно платників податків -позитивне та раціональне податкове якоріння: формування усталеного погляду та підходів, тобто суспільної думки, що полягає в активній участі в оподаткуванні. Водночас прийняття рішень платником не завжди відповідає раціональності й очікуваній ефективності, виявляючи при цьому певні поведінкові упередження, які, в більшості випадків, є протипродуктивними з фінансової точки зору (Zaiane, 2015).…”

Section: Behavioral Aspects Of Harmonious Development Of the Tax Syst...unclassified

Behavioral Aspects of Harmonious Development of the Tax System of Ukraine

Барабаш

2021

Social Economics

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In the light of the COVID-19 pandemic, more and more attention of Ukrainian scientists is drawn to non-traditional factors stimulating the development and harmonization of the tax system, which should include behavioral aspects. The purpose of the article was to outline the latter in the conditions of functioning of the tax system of Ukraine. The influence of behavioral factors was assessed based on the expected results of their activation. It is noted that ignoring the above factors encourages taxpayers to make irrational decisions and violations of tax legislation, which is expressed in tax evasion or avoidance. However, the same aspects can be potentially effective in harmonizing the current tax system. To outline the current behavioral aspects of the impact on taxation in Ukraine, the existing results of the tax system were studied, the basic factors influencing them were identified and the desired qualitative effects in the future were outlined. I claim that сurrently, the tax system of Ukraine is characterized by the predominance in the structure of revenues of the Consolidated Budget of Ukraine of the share of indirect taxes over direct ones. And although at the end of 2020 this figure, compared to 1992, decreased by 3.4%, the inflated tax burden is felt by all taxpayers. In addition, excessive fiscalization of the economy does not promote investment activities that could improve the country's economic climate. Outlining the range of main factors that can be used to adjust the economic behavior of taxpayers, as well as factors that directly affect the taxpayer's decision, made it possible to form a list of active behavioral aspects relevant in modern conditions for harmonization of Ukraine's tax system. Among them, there is the transfer of part of the financial obligations to perform direct functions of the state to the payers themselves, in particular by directing funds from the excise tax on fuel for road repairs and rehabilitation, strengthening equity trends by increasing taxation of capital and luxury goods, setting progressive rates taxes, granting benefits and preferences to certain categories of payers; adjusting the preferences of taxpayers through the level of taxation. Under general condition that the state modifies the tax targets from fiscal to incentive, the result should be a new model of taxpayers' behavior.

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Section: Behavioral Aspects Of Harmonious Development Of the Tax Syst...unclassified

Behavioral Aspects of Harmonious Development of the Tax System of Ukraine

Барабаш

2021

Social Economics

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“…items were adapted for this study. Some notable among the studies consulted at this stage are: Ackert (2014), DeBondt et al (2010), Hirshleifer (2001), Hoffmann et al (2011, Kudryavtsev et al (2013), Nofsinger (2014, Prosad (2014), Ricciardi and Simon (2000), Statman (2014), Tseng (2013) and Zaiane (2015). Excluding the cover page that was used to introduce this research to the respondents, the developed questionnaire was structured into Sections A and B.…”

Section: Institutional Investors Vs Retail Investorsmentioning

confidence: 99%

Institutional investors vs retail investors

Jaiyeoba

Abdullah

Ibrahim

2019

IJBM

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Purpose Guided by several pioneered studies, the purpose of this paper is to comprehensively investigate the investment behaviours of Malaysian retail and institutional investors in an attempt to identify whether the influence of psychological biases is equally applicable to investor divides. Design/methodology/approach The researchers have adopted a quantitative research design by way of survey methodology to obtain data from institutional and retail investors in Malaysia. In addition, the authors have mainly employed second-order measurement invariance analysis to uncover the difference across investor divides. Findings The tests of measurement invariance at the model level indicate an insignificant difference between institutional investors and retail investors. The post hoc test (at the path level) reveals that institutional and retail investors are similar with respect to representative heuristic, overconfidence bias and anchoring bias; though the results also show that they are different with respect to religious bias and herding bias. Research limitations/implications Based on the findings of this study, it is generally not logical to assume that institutional investors completely behave rational during investment decisions. Besides, future researchers are called upon to directly compare the investment decisions of institutional and retail investors with respect to whether the influence of psychological biases is equally applicable to them, particularly on the investigated psychological biases and other psychological biases that are not covered in this study. Originality/value This study has offered insight into whether the influence of psychological biases is equally applicable to institutional and retail investors in Malaysia using second-order measurement invariance analysis. This study is unique in context and the approach it has adopted.

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“…However, psychological factors can provide explanations which are linked to cognitive biases and heuristics. Human decision-making does not seem to conform to rationality and market efficiency but exhibits certain behavioral biases that are clearly counter-productive from the financial perspective (Zaiane, 2015). According to Azzam (2002), some emerging countries in the MENA region opened their markets to foreign investors in the 1990s and then offered new possibilities for diversification.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Investor behavior and psychological effects: herding and anchoring biases in the MENA region

Tlili

Chaffai

Medhioub

2023

CFRI

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PurposeThe aim of this paper is double: firstly, to examine the presence of herd behavior in four MENA stock markets (the Egyptian, Jordanian, Moroccan and Tunisian markets), and secondly, to study the anchoring behavior in these markets.Design/methodology/approachThe authors employ quantile regression analysis for testing herding bias in the MENA region, following the methodology of Chiang and Zheng (2010). Regarding the evaluation of anchoring bias, the authors follow the methodology of Lee et al. (2020). The study uses daily stock index returns ranging from April 1, 2011, to July 31, 2019, as well as CAC40 and NASDAQ returns.FindingsThe authors find evidence of herding during down-market periods in the lower tail for Egypt, Jordan and Tunisia, while this bias is detected during up-market periods in the lower tail for Morocco. In addition, based on historical returns, the authors conclude that there is a momentum effect in these markets, and they are dependent on the CAC40 and NASDAQ indices.Practical implicationsThis paper confirms the findings of previous works devoted to some emerging markets such as China, Japan and Hong Kong, where anchoring and herding are considered the most important and impactful heuristic and cognitive biases in making decisions under uncertainty, particularly during down-market periods.Originality/valueThe paper contributes to the empirical literature in herding and anchoring biases for MENA countries. The absence of empirical work on the effect of these biases on stock prices in emerging markets and those of the MENA zone leads to the discussion of the impact of psychological biases on these of markets.

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Behavioral Biases of Individual Investors: The Effect of Anchoring

Cited by 7 publications

References 24 publications

Behavioral Aspects of Harmonious Development of the Tax System of Ukraine

Behavioral Aspects of Harmonious Development of the Tax System of Ukraine

Institutional investors vs retail investors

Investor behavior and psychological effects: herding and anchoring biases in the MENA region

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