Behavioural finance: the role of psychological factors in financial decisions

Muradoğlu, Gülnur; Harvey, Nigel

doi:10.1108/19405971211284862

Cited by 84 publications

(68 citation statements)

References 90 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…A number of empirical investigations in behavioural finance are focusing on foreign markets (Polak 2012) with their pattem for investor's psychology and biases (Muradoglu, Harvey 2008). These interpretations may vary depending on differences in culture and mentalify of citizens.…”

Section: Financial Behaviour Of Financially Literate Householdsmentioning

confidence: 99%

Behavioural Finance: Theory and Survey / Finansinė Elgsena: Teorija Ir Tyrimas

Jurevičienė

Ivanova

2013

Mokslas - Lietuvos Ateitis

View full text Add to dashboard Cite

The paper analyses the importance of behavioural finance theories in household decision-making process. Behavioural finance theories investigate emotional characteristics to explain subjective factors and irrational anomalies in financial markets. In this regard, behavioural theories and behavioural anomalies in the decision-making process are examined; the application opportunities in the financial market are described. The aim of investigation is to determine the basic features and slopes of behavioural finance in concordance with financial decisions of a household. The survey method was applied to ascertain financial behaviour of literate households.

show abstract

Section: Financial Behaviour Of Financially Literate Householdsmentioning

confidence: 99%

Behavioural Finance: Theory and Survey / Finansinė Elgsena: Teorija Ir Tyrimas

Jurevičienė

Ivanova

2013

Mokslas - Lietuvos Ateitis

View full text Add to dashboard Cite

show abstract

“…In general, investment-related decision making includes cognitive tasks that can be explained and grounded in human factors and psychological research (Muradoglu & Harvey, 2012). To assess investors' information processing, Maines and McDaniel`s (2000) model is employed here.…”

Section: Theory and Hypothesis Developmentmentioning

confidence: 99%

Integrated Reporting and Assurance of Sustainability Information: An Experimental Study on Professional Investors’ Information Processing

Reimsbach

Hahn

Gürtürk

2017

European Accounting Review

212

199

View full text Add to dashboard Cite

Sustainability-related non-financial information is increasingly deemed value relevant. Against this background, two recent trends in non-financial reporting are frequently discussed: integrated reporting and assurance of sustainability information. Using an established framework of information acquisition, evaluation, and weighting, this experimental study investigated how the choice of reporting format interacts with the voluntary assurance of sustainability information. The results from a sample of professional investors underline the important role of assurance in the context of voluntary disclosure and illustrate the relevant interaction with the reporting format. Assurance of sustainability information positively affected professional investors' evaluation of a firm's sustainability performance, resulted in a higher weighting of this information, and led to higher investment-related judgments. However, this assurance effect was weaker in the case of integrated reporting compared to separate reporting. We attribute this effect to a cognitive bias in decision making when assured financial performance and non-assured sustainability performance are presented in the same report.

show abstract

“…It does not intend to replace neoclassical finance, rather, it expands the domain of finance beyond market efficiency, portfolio building and asset pricing (Statman, 2014). More so, behavioural finance is useful in making good recommendations to the investors on how to understand themselves (Muradoglu & Harvey, 2012).…”

Section: Academic Finance Theoriesmentioning

confidence: 99%

A qualitative inquiry into the investment decision behaviour of the Malaysian stock market investors

Jaiyeoba

Haron

2016

QRFM

View full text Add to dashboard Cite

Purpose The main purpose of this study was to examine the investment decision behaviour of retail investors in Malaysia. Design/methodology/approach The study adopted semi-structured interviews to solicit an understanding of six retail investors on investment decision behaviour in Malaysia. Content analysis technique was used to analyse the data and verbatim texts were applied in discussing the emergent themes. Findings The findings indicate that retail investors in Malaysia are patriotic in nature, and their investment decisions are based on feeling of comfort or convention rather than quantitative analysis. They rely so much on their findings rather than third party’s views for making investment decisions. They were influenced by the psychological biases because they herd on the information. Challenges are solved through experience, and they believe that proper understanding of the financial and economic settings of the country can enhance better investment decision-making. Research limitations/implications A more detailed investigation on the investors’ behaviour with more samples may expand our understanding of this issue. Future studies need to examine the investment decision behaviour with more samples. Practical implications First, it will prepare hit and run investors to be more ready to remain in the market and improve their skills on how to make sound investment decisions. Second, it helps the investors to know that knowledge of traditional finance theory is not sufficient to excel in stock market, and, hence, they need to know more about behavioural finance. Third, investors are exposed to various reasons as to why investment decisions deviate from expected and different means of solving the challenges faced in making investment decision within the Malaysian context. Fourth, investors are reminded that understanding the financial settings before investing is essential. Finally, policy makers in stock market are able to understand the retail investors’ behaviour. Originality/value This study examines the experience and prospect to remain as stock market investors, their priorities in selecting the right company for investment purposes, the kind of information seeking from third parties, the challenges faced by them and other important considerations in investment decisions. These have never been examined together in this way in investigation of retail investors’ investment behaviour.

show abstract

Behavioural finance: the role of psychological factors in financial decisions

Cited by 84 publications

References 90 publications

Behavioural Finance: Theory and Survey / Finansinė Elgsena: Teorija Ir Tyrimas

Behavioural Finance: Theory and Survey / Finansinė Elgsena: Teorija Ir Tyrimas

Integrated Reporting and Assurance of Sustainability Information: An Experimental Study on Professional Investors’ Information Processing

A qualitative inquiry into the investment decision behaviour of the Malaysian stock market investors

Contact Info

Product

Resources

About