Investor characteristics and the effect of disposition bias on the Tunisian stock market

Bouteska, Ahmed; Regaieg, Boutheina

doi:10.1016/j.bir.2018.05.004

Cited by 12 publications

(4 citation statements)

References 38 publications

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“…Investors have high experience then, which will affect the satisfaction level caused by the success of investing. Investment success is defined as the ability of investors to develop their capital and increase their profits through Capital skins obtained from the capital market (Bouteska & Regaieg, 2018). 1, the validity of which is tested using loading factor > 0.7.…”

Section: Effect Of Investor Experience On Investor Satisfactionmentioning

confidence: 99%

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Disposition Effect: Does Investor Confidence Matter? Examining Service From Securities Brokerages

Yulianto¹,

Wijaya²

2023

J. Professional Business Review

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Purpose: This study aims to analyze the role of training program to develop novice investors confidence in buying a stock. Novice investors undergo dilemma to buy stock due to limited knowledge which resulting disposition effect. Research regarding disposition effect which associated with training for novice investors is still limited Theoretical framework: The disposition effect is the tendency when investors sell stocks that have the potential to experience future profits early, otherwise investors tend to hold stocks that have the potential to experience losses for too long so that investors tend to experience losses. Design/methodology/approach: The research using quantitative approach and employ purposive sampling method with a total sample of 192 respondents. Respondent criteria are novice investor and have limited knowledge in stock market. Each respondent is required to fill questionnaire to obtain data which consist of strongly disagree and strongly agree. Validity, reliability, and hypothesis testing is examined Findings: The results indicate investor training influence investor experience. The result also showed that the training program and investor experience impact investor confidence. The result implies investor need training and experience to reduce disposition effect. The result represents training program, investor experience, and investor confidence affect investor satisfaction Research, Practical & Social implications: The research is asserted that novice investor with limited experience and knowledge need do practice. Novice investor understanding to buy stock will develop investor confidence. Originality/value: The result elaborate training for novice to develop investor confidence and experience. The more experienced investor will reduce disposition effect. Previous research is lack of disposition effect elaboration and its implication on investor satisfaction.

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Section: Effect Of Investor Experience On Investor Satisfactionmentioning

confidence: 99%

“…When the disposition effect is high, investor satisfaction is lower. This is due to investors selling shares quickly but having a high rate of increase (Bouteska & Regaieg, 2018).…”

Section: Introductionmentioning

confidence: 99%

Disposition Effect: Does Investor Confidence Matter? Examining Service From Securities Brokerages

Yulianto¹,

Wijaya²

2023

J. Professional Business Review

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“…Berdasarkan temuan tersebut penelitian ini menyimpulkan bahwa efek disposisi tidak dipengaruhi oleh rasa percaya diri yang tinggi seperti yang dipaparkan oleh teori keuangan berbasis perilaku. Menurut teori, rasa percaya diri yang berlebihan akan mengakibatkan keputusan yang impulsive sehingga terjadi efek disposisi dengan menjual keuntungan secara impulsive dan cenderung bertahan karena terlalu percaya diri harga akan mengalami pembalikan di kemudian hari (Bouteska & Regaieg, 2018;Gao et al, 2021;Nur Aini & Lutfi, 2019;Prosad et al, 2018;Trejos et al, 2019).…”

Section: Pembahasanunclassified

Investasi Cryptocurrencies. Bertahan dengan Kerugian Cryptocurrencies?

Kiky,

Saputera

2023

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Holding the loss without reason is one of the behavioural biases which are very common to be found in investment. Investment is also entering a new era of modern and sophisticated assets. One of these assets is known as cryptocurrencies. This article is written to detect whether the disposition effect is occurring to cryptocurrency investors and whether they are holding the loss. The disposition effect in this research was measured as respondents' perception of whether they sold the winning assets too fast and kept the failure in the long run. The result from this research is disposition effect was indeed found in descriptive statistics but failed to confirm the influence of independent variables on the disposition effect using the linear regression method. There is no effect of financial literacy, overconfidence, regret aversion, and risk tolerance on the perceptional disposition effect, which the emotional factor of loss aversion might cause. This will cause an individual to be reluctant to realize the loss in the hope the asset will return to the initial purchasing price. Further investigation will be the future area for developing research about the disposition effect. Interestingly, this research also found the literacy score of the respondents is deficient, but they are very confident in investing in the most volatile asset, such as cryptocurrencies. This research has several limitations, such as the sample being relatively similar in financial literacy, so selecting a wide range (heterogenous), sample in future research is crucial. Another improvement is in methodology, and perhaps an experimental approach could be a promising field in the study of behavioural bias in the future.

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“…They showed bias in the later stage of knowledge, despite initially being rational (Kumar and Goyal 2016;Guo et al 2022), simply because the presence of risks in investment could point to the bounded rationality of investors (Kahneman and Tversky 1979;Tobin 1958;Yao and Li 2013;Simon 2000). Furthermore, age composition revealed a different set of confidence in the effectiveness of decision making, as older adults rated their problem solving better but lack the determination relative to youth or middle-aged people (Thornton and Dumke 2005;Bouteska and Regaieg 2018;Putu et al 2022;Prihatini et al 2022). The high emotional salience condition makes the young and middle-aged more proactive in regulating emotion than passive older adults (Blanchard-Fields et al 2004;Yeung et al 2012).…”

Section: Introductionmentioning

confidence: 99%

Chain Reaction of Behavioral Bias and Risky Investment Decision in Indonesian Nascent Investors

Parmitasari

Syariati

Sumarlin

2022

Risks

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Early investors possess unique sets of decision-making characteristics. They are more open to experience and eager to face risks. However, to the best of the authors’ knowledge, the discussions of nascent investors upon making the investment decision and its eroding biases were still elusive. The vital role of emotion as a bias in decision making was also inadequately addressed. This study enhanced behavioral finance knowledge by examining emotion’s role in regulating the illusion of control, overconfidence, and investors’ decision making. In total, 456 initial investors in Indonesia participated in online questionnaires, forming the data for covariance-based structural model analysis. This study found that emotion significantly increased the illusion of control, but not overconfidence or decision making, contrary to the bulk of previous studies. The illusion of control exhibited a substantial significant effect of as much as 86.4% toward overconfidence, followed by a considerable increase in decision making. The results of our study also pointed to the unique chain effects of biases affecting the decision-making process of nascent investors in the emerging market. This finding implied they possessed a unique bias mechanism in constructing their decision.

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Investor characteristics and the effect of disposition bias on the Tunisian stock market

Cited by 12 publications

References 38 publications

Disposition Effect: Does Investor Confidence Matter? Examining Service From Securities Brokerages

Disposition Effect: Does Investor Confidence Matter? Examining Service From Securities Brokerages

Investasi Cryptocurrencies. Bertahan dengan Kerugian Cryptocurrencies?

Chain Reaction of Behavioral Bias and Risky Investment Decision in Indonesian Nascent Investors

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