Role of Illusion of Control Bias in Herding Behaviour

Metilda, J. Mary

doi:10.21095/ajmr/2015/v8/i1/88220

Cited by 2 publications

(3 citation statements)

References 10 publications

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“…This result for herding is in in-line with the findings of Daniel et al (1998) , Fernández et al (2001 , 2011 ), Nofsinger (2005) , Epstein and Schneider (2008) , Abreu and Mendes (2012) , Nguyen and Schüßler (2012) , Stefan and David (2013) , Metilda (2015) , Mishra and Metilda (2015) , Pavlovic (2018) , and Narasimha and Mushinada (2018) .…”

Section: Discussionsupporting

confidence: 89%

“…The illusion of control is a situation in which investors overstated their skills to control events, and they consider that the outcomes of unpleasant events are in their hands ( Metilda, 2015 ). The individual investor who is affected by the illusion of control thinks that his skills are very worthy and productive.…”

Section: Literature Reviewmentioning

confidence: 99%

“…It is demonstrated that investors having an illusion of control attribution are consider as a more risk-taker in investing ( Boyd and Vozikis, 1994 ). The illusion of control is a bias in which individual investors overestimated their capability to control any events, and they think that the outcomes of unpleasant events are in their control ( Metilda, 2015 ). Fellner (2009) examined the illusion of control bias in the portfolio allocation of individual investment.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products

et al. 2021

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The study aimed to investigate the impact of behavioral biases on herding for Islamic financial products with the mediation of shariah literacy. An adopted questionnaire from several published studies was used to collect data. The data were collected from 410 respondents and were analyzed with SmartPLS. The results for the direct impact showed that self-attribution, illusion of control, and information availability have a positive and significant impact on herding for Islamic financial products while shariah literacy showed an insignificant impact on herding. The results for mediation showed that previously significant and positive impact turned to insignificant when shariah literacy was introduced as mediating variable between the illusion of control, self-attribution, information availability, and herding. From a theoretical perspective, this study would contribute to the existing body of knowledge of financial decision making from shariah literacy point-out. On the other hand, the findings of this study may be useful for investors to avoid herding in the Islamic financial markets. The authors synthesize the contribution made by behavioral finance studies in extending the knowledge of herding behavior in Islamic financial products with a mediating role of shariah literacy. The key limitation of the study includes data that were collected from three districts of Punjab, Pakistan.

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Section: Discussionsupporting

confidence: 89%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products

et al. 2021

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Measurement of Overconfidence, Illusion of Control and Optimism in the Context of Behavioral Finance: Case of University Students

Tekin

2020

Anemon Muş Alparslan Üniversitesi Sosyal Bilimler Dergisi

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Davranışsal finans, piyasa anomalilerinin yanı sıra bu anımalilere neden olan önyargıların incelenmesini de konu almaktadır. Literatüre bakıldığında kişilerin karar süreçleri üzerinde etkisi olduğu belirtilen çok sayıda önyargıdan bahsedildiği görülmektedir. Bunlar arasında üzerinde ayrıca durulan önyargıların ise kendine aşırı güven, kontrol yanılsaması ve aşırı iyimserlik olduğu dikkati çekmektedir. Bu çalışmada bu üç önyargının ölçülmesini hedefleyen ifadelerden oluşan ölçeklerin Türkiye'de üniversite öğrencileri üzerindeki güvenilirliği ve geçerliliği test edilmiştir. Önyargıları ölçülmesini hedefleyen ve bu çalışmada kullanılan ölçeğin ilk halinde 19 madde yer almaktadır. Öğrencilerin demografik bilgilerini de içeren anket formu farklı üniversitelerde öğrenim gören toplam 522 öğrenciye uygulanmıştır. Yapılan analizler sonucunda ölçeğin son halinin Cronbach Alfa değerinin 0,825 olduğu ve ölçekte yer alan ifadelerin 4 faktör altında toplandığı tespit edilmiştir.

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Role of Illusion of Control Bias in Herding Behaviour

Abstract: Herding is a behavior that follows the decision of the majority and is described as an imitation behavior

Cited by 2 publications

References 10 publications

The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products

The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products

Measurement of Overconfidence, Illusion of Control and Optimism in the Context of Behavioral Finance: Case of University Students

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