Emotional finance: determinants of phantasy

Abstract

Purpose In this study, scales are developed for phantasy and its determinants, which is accepted as an important variable in investment preference with an emotional finance perspective. The scales developed in this framework are narrative, divided mind, group feel, informed herding, uninformed herding and phantasy. In addition, the power of these determinants to explain phantasy was investigated. Design/methodology/approach For this purpose, the data was obtained between May 01, 2019 and November 30, 2019 via an online survey with convenience sampling. First, a pilot study consisting of 200 subjects was performed. Then, additional data was collected. The total number of subjects was 648. The authors used IBM SPSS Statistics and AMOS for analysis. Exploratory factor analysis and discriminant analysis were performed. In addition, confirmatory factor analysis was performed after an additional data collection process with structural equation modeling. Findings As a result of analyses, the validity and reliability of these scales were ensured statistically. It was also found that divided mind directly affects phantasy, but group feel and narrative indirectly affect by informed herding. The “unknown and new investment” preference, which is accepted as a typical feature of the bubble periods, is modeled with the relevant variables. In this framework, it has been found that the variables that refer individuals to the relevant investment preferences are phantasy, group feel, uninformed herding and divided mind. Originality/value The study is unique because of its findings and developed scales. The findings are valuable in that the theoretically alleged relations were also obtained empirically.

Evaluation of investment preference with phantasy, emotional intelligence, confidence, trust, financial literacy and risk preference

“…Possession of it allows unconscious dreams to be satisfied (Tuckett and Taffler, 2008;Aren and Hamamcı, 2021e). All new and exciting instruments in the financial markets are considered to have the potential to become phantastic objects (Tuckett, 2009;Aren and Hamamcı, 2021e). The desire to realize phantasies leads individuals to buy (Montazeribarforoushi et al, 2017); in particular, this unconscious desire that creates financial bubbles or leads people to enter Ponzi schemes (Taffler and Tuckett, 2003;Aren, 2019).…”

“…Even if people are not aware of this belief and dream, it affects their decisions and preferences. Aren and Hamamcı (2021e) referred to the relationship between phantasy and risky investment intention and investment preferences in their work. In this study, the existence and strength of this relationship were shown again and the previous study findings were supported.…”

“…Investors' investment preferences cannot be explained only by financial figures (Aren and Hamamcı, 2021e). Therefore, economists have empirically investigated the effects of emotions, opinions and views on financial decisions in recent years (Kalaycı et al, 2020).…”

Emotional Finance: As a New Approach to Understanding the Markets

“…The Object Relation Established by The Investor Akerlof and Shiller (2009) suggest that economists have actually been using the concept of trust in economic evaluations for a long time, but have been associating trust only with "prediction". According to them, since individuals are rational, they act on the basis of rational predictions.…”

The Trouble with Minding Markets: Emotional Finance in Context

“…That interpretative strategy makes very little sense, however, when you consider that the reason that the risk manager is pulling the trader is that the frustration and disappointment causes him to exaggerate risk, whereas the success encourages him to underrate risk vis-à-vis the market as a whole. Crucially, in Tuckett's model, the problem is not the distance between the judgements of individuals and the group, but rather the distance between the phantasies of market participants and his notion of 'reality' , which can only be apprehended ex-post, but seems in fact to be based upon some notion of equilibrium and rationality that hovers behind the precise notions that he and Taffler try to critique [28], hence the hermeneutic circle.…”