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

Jurevičienė, Daiva; Ivanova, Oksana Evgenevna

doi:10.3846/mla.2013.08

Cited by 25 publications

(13 citation statements)

References 16 publications

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“…From the theoretical standpoint, behavioural economists broadly put subjective irrational behaviour hypothesis into two, namely, cognitive deviations and prospect theory (Jurevičienė and Ivanova, 2013). With the first category of cognitive theory, this is where it is assumed that the decisions taken by an individual are influenced by his mind in which both emotions and behaviour are determined by self-perception and contemplation.…”

Section: Literature Reviewmentioning

confidence: 99%

Behavioral factors affecting investment decision-making in bank stocks on the Ghana stock exchange

Quaicoe

Eleke-Aboagye

2021

QRFM

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Purpose The finance literature is awash with papers bordering on the classical assumption that investors are rational in their decision-making, and hence, would always take decisions rationally given the right information, thus making the stock market efficient. This assumption has, however, been found to be at least inadequate given the fact that investors are complex psychological beings full of emotions. This paper aims to investigate the psychological factors that tend to influence the decisions of investors. Design/methodology/approach The study used a questionnaire to survey a total of 350 investors holding stocks of listed banks on the Ghana Stock Exchange (GSE). Findings The study found the existence of various behavioural biases among the investors surveyed. The most dominant factor or bias found to be influencing investment decisions of respondents was herding with nearly 62% weight. Again, biases such as regret aversion and gambler’s fallacy were also found to strongly influence the decisions of investors, along with mental accounting, overconfidence and anchoring. Practical implications The presence of these behavioural biases, therefore suggests that investors do not always take rational decisions, and hence, making the stock market efficient and that as psychological beings, their investment decisions are impacted strongly by their psychology. Originality/value The study used a questionnaire to survey a total of 350 investors holding stocks of listed banks on the GSE with a special focus on overconfidence, anchoring, herding, gambler’s fallacy, mental accounting and regret aversion as the variables of interest, the first of its kind in Ghana.

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Section: Literature Reviewmentioning

confidence: 99%

Behavioral factors affecting investment decision-making in bank stocks on the Ghana stock exchange

Quaicoe

Eleke-Aboagye

2021

QRFM

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“…Since the basis of any investment is the decision-making process and almost all decisions are made in uncertain terms and these decisions are influenced by the investor's feelings and sentiment; Therefore, it can be argued that market sentiment reflects investors' attitude toward the market forecast prices. This claim can be explained in behavioural finance theory (Jurevičienė and Ivanova, 2013). The behavioural finance is a new approach to respond to the abnormal phenomena in the market, which states that the change of stock price does not rely solely on the fundamental values provided by accounting information (logical values), but also depends on the investor sentiment (Baker and Wurgler, 2006;Kim and Ha, 2010;Lin, 2010;Zhu and Niu, 2016).…”

Section: Investor Sentiment and Stock Price: A Behavioural Finance Perspectivementioning

confidence: 99%

“…Also, according to related theoretical bases, it has been found that emotions at the time of decision-making often lead to behaviours that are reciprocal of behaviours that are determined by measuring the costs and long-term benefits of activities and described by behavioural finance theory (Jurevičienė and Ivanova, 2013;Rossi and Gunardi, 2018;Rossi and Fattoruso, 2017). Stock pricing also includes long-term interest rates (the right to share in the net future cash flows to invest) and costs (future cash flow risks) (Bower et al, 1984).…”

Section: Introductionmentioning

confidence: 99%

Investor sentiment, stock price, and audit quality

Jokar

Daneshi

2020

IJMFA

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Numerous studies have investigated the effect of audit quality on investors' decisions in the stock market, but the direction of most of these studies has focused solely on the rationality principle of economic factors and the documentation of the relationship between audit quality and stock price. They have rarely investigated the role of independent auditing on the emotional behaviours of investors in the stock market; hence, the main objective of this research is to investigate the moderating effect of audit quality on the relationship between investor sentiment and stock price. The results show that the auditor reports and the auditor specialisation in the industry strengthened the investors' trust in the accounting information and affected the investor sentiment in-stock pricing; however, the auditor size and the auditor tenure did not have a moderating effect and did not affect the relationship between investor sentiment and stock price.

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“…Behavioral Finance Theories (BFT), which is an intersection of the fields of psychology and sociology with the science of finance, is traced to the 1890s. Earlier scholars such as Le Bon (1896) in Jurevičienė and Ivanova (2013) is recognized to be one of the pioneer scholars to suggest that investors demonstrate irrational behaviors in their actions. This was informed by the realization that many anomalies in the markets are the results of psychological factors, which are inherent in decision-making.…”

Section: Literature Reviewmentioning

confidence: 99%

“…For example, Lown, Kim, Gutter, and Hunt (2015) observed that self-efficacy (Confidence) had significant effect on savings, while Meier and Sprenger (2010) found out that lack of selfcontrol results in massive credit due to present-biased preferences. Also studies on the relationship between behavioral factors and financial inclusion are at nascent stages (Barber & Odean, 2007;Binoy & Subhahree, 2018;Jurevičienė & Ivanova, 2013), yet Behavioral Finance Theories (BFT) attest that these factors affect economic decisions. Furthermore, there is an emptiness of empirical studies ton the mediating effects of adoption of financial innovations on the relationship between behavioral factors and FI.…”

Section: Introductionmentioning

confidence: 99%

Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

Byegon

Cheboi

Bonuke

2019

SJOM

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Purpose: Understanding the mediating role of the adoption of financial innovations on the relationship behavioral factors and utilization of formal financial services was the main aim of this research. The behavioral factors examined were self-control, confidence and social proof. The study is premised on behavioral finance theories. Design/Methodology: The positivist approach and explanatory research designs were adopted to understand the relationships between the variables under investigation. A sample of 486 owners/managers of licensed micro-enterprises in Nairobi, Kenya were selected using stratified random sampling technique. Primary data was collected through a structured questionnaire. Hypotheses were tested using Hayes and Zhao approach for mediation analysis. Findings: The results showed that financial innovations mediated the relationship between each of the behavioral factors and financial inclusion, that is; self- control (β =.0941, ρ= .00), confidence; (β = .1019, ρ = .00) and social proof (β = .1036, ρ = .00). Practical implications: The study has brought into fore the mediating role of financial innovations on the relationship between the three behavioral factors and financial inclusion. Thus, practitioners are encouraged give due attention to behavioral factors and financial innovations in policy formulation and programs geared towards optimal utilization of financial services.

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

Cited by 25 publications

References 16 publications

Behavioral factors affecting investment decision-making in bank stocks on the Ghana stock exchange

Behavioral factors affecting investment decision-making in bank stocks on the Ghana stock exchange

Investor sentiment, stock price, and audit quality

Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

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