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1
Statman, Meir. "My way to the second generation of behavioral finance." Review of Behavioral Finance 12, no. 1 (March 9, 2020): 27–34. http://dx.doi.org/10.1108/rbf-10-2019-0147.
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PurposeThe purpose of this paper is to depict how the author's way from standard finance to the first and second generations of behavioral finance illustrates the ongoing general transition.Design/methodology/approachThe first generation, starting in the early 1980s, largely accepted standard finance's notion of people's wants as “rational” wants – restricted to the utilitarian benefits of high returns and low risk. That first generation commonly described people as “irrational” – succumbing to cognitive and emotional errors and misled on their way to their rational wants. The second generation describes people as normal.FindingsIt begins by acknowledging the full range of people's normal wants and their benefits – utilitarian, expressive and emotional – distinguishes normal wants from errors and offers guidance on using shortcuts and avoiding errors on the way to satisfying normal wants. People's normal wants include financial security, nurturing children and families, gaining high social status and staying true to values. People's normal wants, even more than their cognitive and emotional shortcuts and errors, underlie answers to important questions of finance, including saving and spending, portfolio construction, asset pricing and market efficiency.Originality/valueThe article identifies that people's normal wants include financial security, nurturing children and families, gaining high social status and staying true to values. People's normal wants, even more than their cognitive and emotional shortcuts and errors, underlie answers to important questions of finance, including saving and spending, portfolio construction, asset pricing and market efficiency.
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Farrell, Anne M., Joshua O. Goh, and Brian J. White. "The Effect of Performance-Based Incentive Contracts on System 1 and System 2 Processing in Affective Decision Contexts: fMRI and Behavioral Evidence." Accounting Review 89, no. 6 (July 1, 2014): 1979–2010. http://dx.doi.org/10.2308/accr-50852.
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ABSTRACT Managers may rely on emotional reactions to a setting to the detriment of economic considerations (“System 1 processing”), resulting in decisions that are costly for firms. While economic theory prescribes performance-based incentives to align goals and induce effort, psychology theory suggests that the salience of emotions is difficult to overcome without also inducing more deliberate consideration of both emotional and economic factors (“System 2 processing”). We link these perspectives by investigating whether performance-based incentives mitigate the costly influence of emotion by inducing more System 2 processing. Using functional magnetic resonance imaging and traditional experiments, we investigate managers' brain activity and choices under fixed wage and performance-based contracts. Under both, brain regions associated with System 1 processing are more active when emotion is present. Relative to fixed wage contracts, performance-based contracts induce System 2 processing in emotional contexts beyond that observed absent emotion, and decrease the proportion of economically costly choices. Data Availability: Contact the authors.
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BOGATYREV, Semen Yu. "New finance: Psychological measurement of value." Finance and Credit 27, no. 5 (May 28, 2021): 1156–77. http://dx.doi.org/10.24891/fc.27.5.1156.
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Subject. The article addresses emotional factors that affect value under psychological concepts. It describes processes of obtaining information for surveys when measuring emotions, adjusting the evaluation tools, taking into account new analytical capabilities provided by the use of psychological measurement. Objectives. The study aims at creating a methodology to consider the impact of emotional factors that become apparent under the influence of psychological concepts, on value. Methods. I employ methods of induction and deduction in survey data processing. Results. The paper discloses the content of the main methods for recording emotions in the process of making a conclusion about the value by financial decision makers under the influence of psychological concepts. It demonstrates tools for implementing the methods of psychological measurement in valuation. The findings may be helpful in the work of modern appraisers and value analysts. It is especially important to use the tools for measuring emotions in conditions of digital economy, instability and crisis, a change in the market paradigm, distortion of traditional financial and economic indicators, market volatility. The use of psychological concepts complements and expands the classic assessment toolkit, improves the quality of valuation. Conclusions. The paper concludes on opportunities that financial analysts have, when applying new advances in behavioral finance and modern psychological studies. It outlines prospects for analytical tools development, using new indicators to enhance the efficiency of valuation results.
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Shogren, Jason F. "Microeconomics: Behavioural Economics and Finance." Journal of Economic Literature 51, no. 4 (December 1, 2013): 1192–94. http://dx.doi.org/10.1257/jel.51.4.1183.r5.
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Jason F. Shogren of University of Wyoming reviews, “Behavioural Economics and Finance” by Michelle Baddeley. The Econlit abstract of this book begins: “Explores key concepts and insights from behavioral economics and its interdisciplinary approach to real-world decision making. Discusses foundations—psychology; foundations—neuroscience and neuroeconomics; learning; sociality and identity; heuristics and biases; prospects and regrets; personality, moods, and emotions; time and plans; bad habits; financial instability; and behavioral macroeconomics, happiness, and well-being. Baddeley is Fellow and Director of Studies (Economics) at Gonville and Caius College, Cambridge University.”
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Azouzi, Mohamed Ali, and Anis Jarboui. "CEO emotional bias and investment decision Bayesian Network method." Corporate Ownership and Control 9, no. 2 (2012): 239–56. http://dx.doi.org/10.22495/cocv9i2c2art1.
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This research examines the determinants of firms’ investment introducing a behavioral perspective that has received little attention in corporate finance literature. The following central hypothesis emerges from a set of recently developed theories: Investment decisions are influenced not only by their fundamentals but also depend on different factors. One factor is the biasness of any CEO to their investment, biasness depends on the cognition and emotions, because some leaders use them as heuristic for the investment decision instead of fundamentals. Keeping this in view, this paper shows how CEO emotional bias (optimism, loss aversion and overconfidence) effects the investment decisions. I will use Bayesian Network Method to examine this relation. Emotional bias has been measured by means of a questionnaire comprising several items. As for the selected sample, it has been composed of some100 Tunisian executives. Our results have revealed that the behavioral analysis of investment decision implies leader affected by behavioral biases (optimism, loss aversion, and overconfidence) adjusts its investment choices based on their ability to assess alternatives (optimism and overconfidence) and risk perception (loss aversion) to create of shareholder value and ensure its place at the head of the management team.
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Bogatyrev, S. Yu. "Behavioral valuation in the Russian and Western stock markets." Finance and Credit 26, no. 3 (March 30, 2020): 549–64. http://dx.doi.org/10.24891/fc.26.3.549.
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Subject. The article discusses changes in qualities of market actors that influence the valuation of assets, behavioral valuation, ranges of the valuation apparatus components. I focus on the practical implementation of the behavioral pricing and a technique for assessing key indicators of behavioral valuation of assets. Objectives. The study measures ranges of certain values adjusting the beta coefficient, which is used to assess the discount rate under the CAPM so as to arrive at the behavioral discount rate and market value of assets in markets with reference to behavioral factors. Methods. The article demonstrates how the behavioral pricing apparatus is applied. I also present some computations, propose benchmarks for assessing the adjustment to components of the discount rate formula for valuation purposes and in line with the emotional tone in stock markets. Results. I devised and implemented the technique for measuring the emotional tone of news and integrated methods for assessing the behavioral beta in accordance with the behavioral CAMP of Hersch Shefrin and Meir Statman. I tested and verified the hypothesis stating that emotions cause the beta coefficient, which is used by irrational investors use, to diverge from the one embedded in the CAPM. The article shows a range of the beta coefficient used by irrational investors from the one embedded in the CAPM. It can be used to assess the market value of shares in a particular case. Conclusions and Relevance. The theory of behavioral valuation of financial assets was put into practice, unveiling the value of the discount rate constituents, which can serve for cost analysts and appraisers. The findings are useful for valuation, corporate finance, public and municipal finance, fiscal issues, stock exchanges. Behavioral valuation tools are especially relevant in case of instability and crisis, a changing market paradigm, market developments, changes in the rate of return and volatility of financial instruments. Behavioral valuation tools supplements and expands the classical one, improves decision-making on value management in modern markets.
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Wuillaume, Amélie, Amélie Jacquemin, and Frank Janssen. "The right word for the right crowd: an attempt to recognize the influence of emotions." International Journal of Entrepreneurial Behavior & Research 25, no. 2 (February 21, 2019): 243–58. http://dx.doi.org/10.1108/ijebr-10-2017-0412.
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Purpose The purpose of this paper is to propose a better understanding of how entrepreneurial narrative influences resource acquisition in the fundraising context. Design/methodology/approach The paper combines the literature on emotion as information theory from psychology with behavioral finance findings to develop a conceptual framework with research proposals highlighting the use of narratives in the crowdfunding process. Findings The proposition of the paper advocates that entrepreneurial narrative may influence crowdfunders’ attitude and decision to fund a project. It theorizes how emotions in narratives shape the funders’ attitude toward a project and, in turn, their decision to support it. This potential influence is qualified by taking into account the funders’ primary motivations. These motivations affect the degree to which funders rely on affect or cognition to form their attitude and to which they are influenced by more emotional or cognitive narratives. Originality/value This framework is the result of an effort to achieve the recognition of emotions in entrepreneurial funding. The paper creates a bridge between the narrative emotional content and the often neglected emotional arousal of funders (considered as traditional investors) to provide a framework for explaining crowdfunders’ decision making. The paper also offers nuances by taking into account the different audiences’ motivations to fund a project.
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Bogatyrev, S. Yu. "The behavioral valuation apparatus." Finance and Credit 26, no. 2 (February 28, 2020): 257–69. http://dx.doi.org/10.24891/fc.26.2.257.
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Subject. The article discusses behavioral valuation tools and focuses on the creation of the behavioral valuation methodology. Objectives The study reveals mechanisms for setting behavioral valuation indicators. Methods. I prove it is reasonable to apply the classical theory of valuation to set behavioral valuation tools. The article presents elements and formulae of the classical valuation theory and provides mechanisms for setting respective tools. Results. Mood measurement in news is the backbone of analytical tools described in the article. As part of the mood measurement in news, researchers process all news relating to analyzable companies and measure it by seven-grade scale. I articulated the behavioral beta measurement theory in accordance with the behavioral pricing theory of Hersh Shefrin and Meyer Statman. The article unveils the possible effect of using analytical materials, which complement the decision-making process concerning an investment strategy in the most distant retrospect. I showcase how the fundamental analysis and valuation may help you record a quotation per each day while catching what opinion an analyst had about the quotation at the same point of time, what emotional environment surrounded the pricing process within the analyzable period of time. Conclusions and Relevance. The article presents the method to set behavioral valuation tools, being a step towards pricing based on behavioral valuation. The article showcases the relationship of behavioral valuation tools and classical valuation tools and new valuation models. I devised the framework for practical computations. The findings apply to valuation, corporate finance, public and municipal finance, tax issues, stock exchanges. It is especially important to use behavioral valuation tools during the instability and crisis, change in the market paradigm, market shifts, changes in the return and volatility of financial instruments. Behavioral valuation tools supplements and extends the conventional tools used in traditional finance, makes cost management decisions more informed.
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GÜRTLER, MARC, and NORA HARTMANN. "THE EQUITY PREMIUM PUZZLE AND EMOTIONAL ASSET PRICING." International Journal of Theoretical and Applied Finance 10, no. 06 (September 2007): 939–65. http://dx.doi.org/10.1142/s0219024907004500.
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Since the equity premium as well as the risk-free rate puzzle question the concepts central to financial and economic modeling, we apply behavioral decision theory to asset pricing in view of solving these puzzles. US stock market data for the period 1960–2003 and German stock market data for the period 1977–2003 show that emotional investors who act in accordance to Bell's [6] disappointment theory — a special case of prospect theory — and additionally administer mental accounts demand a high equity premium. Furthermore, these investors reason a low risk-free rate. However, Barberis et al. [5] already showed that limited rational investors demand a high equity premium. But as opposed to them, our approach additionally supports dividend smoothing.
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Torga, Eliana Marcia Martins Fittipaldi, Francisco Vidal Barbosa, Alexandre de Pádua Carrieri, Bruno Pérez Ferreira, and Márcia Hiromi Yoshimatsu. "Behavioral finance and games: simulations in the academic environment." Revista Contabilidade & Finanças 29, no. 77 (December 20, 2017): 297–311. http://dx.doi.org/10.1590/1808-057x201804830.
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ABSTRACT The contribution from this study lies in its reflection on the factors that influence market efficiency, which requires a multidisciplinary view to analyze the intervening factors that impact results of the financial system. It also contributes by reflecting on the need for new approaches for training professionals who will go on to work in financial and related areas and preparing them by using different financial analysis techniques; by reflecting on the fact that analytical practices are influenced by social, cognitive, and emotional aspects, enabling the students to be better prepared to act in the financial market; by presenting various technical possibilities and providing more comprehensive knowledge to choose the one that best suits the object of analysis and their preferences; and by reflecting on different ways of perceiving investment opportunities and risk, which can be expanded on in other studies on the segmentation of clients according to their preferences in the investor market. The aim of this study was to analyze how social and psychological aspects influenced the decisions involved in simulated trading operations. The relevance lies in its discussion of the philosophical and epistemological position in finance, which suffers from a vision that only focuses on the rationality of means and does not explain the anomalies verified in the financial market. The study originated from the application of a company game simulating the work of stock market trading desk operators, applied in the Stock Market Operations course and using fundamental, technical, and graphical techniques. The population was intentional and made up of undergraduate and graduate students from one of the four best Brazilian federal universities. The data analysis was performed by analyzing the content of the questionnaires applied and the journal entries made during participant observation.
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BOGATYREV, Semen Yu. "Heuristics as a new way of adjusting the end market value." Finance and Credit 27, no. 7 (July 29, 2021): 1581–99. http://dx.doi.org/10.24891/fc.27.7.1581.
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Subject. The study deals with heuristics as measures of the emotional impact of people who judge about the value and the final result of the valuation. I review ranges of the value variance when influenced by irrational factors. From psychological perspectives, some phenomena are explained with a set of heuristics that exist as part of behavioral finance. Objectives. Referring to the completed studies, I implement elements of behavioral finance, such as heuristics into the method for assessing how financial decision-makers and their emotions influence the value. Methods. The article is based on methods of induction and deduction to process survey results. Results. The article reveals the content of key methods for measuring emotions of financial decision-maker, which conclude on the value, being influenced by heuristics. I demonstrate tools for implementing psychological measurement methods as part of valuation. Conclusions and Relevance. Considering heuristics of value decision-makers, the appraiser and the cost analyst approximate the valuation result to the real conditions, when market actors are irrational. Doing so, they contribute to the quality of the result of appraisal. The findings are applicable to the practice of appraisers, cost analysts, fundamental analysts. Heuristics enrich and expands the classical apparatus of valuation and increases its quality.
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Fairchild, Richard John. "From behavioural to emotional corporate finance: a new research direction." International Journal of Behavioural Accounting and Finance 3, no. 3/4 (2012): 221. http://dx.doi.org/10.1504/ijbaf.2012.052191.
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Al-Anizi, Sa’ad. "Investment Perspective According to Behavioral Finance Science." Journal of Economics and Administrative Sciences 16, no. 58 (June 1, 2010): 1. http://dx.doi.org/10.33095/jeas.v16i58.1486.
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The first thing that comes to mind is the highly important question of whether there were some effects of human behavior and its fluctuations on the theories of the efficient market and the contemporary investment portfolio. According to what has been said by the proponents of these two theories; when the optimal return is realized, the efficiency of the market is achieved in terms of perfect information on prices and risk that supposed to be predetermined in a rational way.
he other question that imposed here is “at what time people should be rational in their investments in the security markets ?”. This means that investors are rational for their efforts devoted to utility maximization, which are perceived as a result of investing their wealth in the best possible manner.
Then, can those two questions be achieved in practice? Many ontological aspects are influenced in their relations by emotions and feelings more than by money as a financial resource . Investors may take irrational financial decisions because of the dominance of those emotions and feelings compared with what investors do toward other actions in their public and special daily life.
Understanding investors financial awareness without taking into account the human action is considered as an outstanding problem which can be assimilated as an attempt to sail with compass, but without guided maps. The importance and necessity of human psychological factor are arise when we are talking about investing common stocks in the security market. Then, this means that issues directing investment decisions of individuals in financial assets whether they were stocks or bonds, can be only interpreted with referring to principles of human behavior.
Absolutely there is no exaggeration if we said that the market in general be advanced, lagged behind , prospected , and crept when making collective decisions in buying securities through viewing psychological factors which capture individuals behaviors after information being collected and analyzed. The validity of an efficient market theory has been widely accepted by its proponents for a long time lasting almost a century so that any research on the psychological aspects of a security market encountered by objection till a close time of ten years .
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BOGATYREV, Semen Yu. "Simulation of emotional differences in the structured query language for databases of financial markets." Financial Analytics: Science and Experience 14, no. 2 (May 28, 2021): 156–73. http://dx.doi.org/10.24891/fa.14.2.156.
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Subject. The article addresses a simulation in the structured query language (SQL) for the Bloomberg information base, the scientifically grounded tools for measuring emotions in markets in the face of financial and pandemic crisis and market imbalances, in addition to classic financial indicators, the creation of analytical tools based on state-of-the-art software tools that integrate the latest advances in behavioral finance and in financial and coefficient analysis, machine learning technologies, and open financial market data. Objectives. The aim is to create a usable toolkit for balanced evaluation of financial and economic situation of companies, based on the analysis of the main Russian and foreign modern means to measure emotions. Methods. The study employs methods of induction, deduction, and modeling. It demonstrates the link between methods and methodologies with new technical means of modern information systems. Results. The paper studies the effect of the heuristics of insufficient reaction and heuristics of excessive self-confidence, using the examples of market drawdown. I developed and implemented a model, using the behavioral finance tools as a factor in stabilizing financial decisions. Conclusions. New software and hardware tools enabled to identify and measure the actions of the heuristics of financial market participants. Financial analysts, when applying the new capabilities of modern information systems for programming and creating user models with required parameters and extensive database, will have new opportunities in the described models. The procedure for collecting and processing the original information required for valuation is simplified.
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Mehta, Hiral D., and Dr Jitesh Parmar. "A STUDY ON EFFECT OF BEHVIORAL BIASES ON INVESTOR’S PREFERENCE REGARDING 80C TAX SAVING INSTRUMENTS IN SURAT CITY." BSSS Journal of Management 12, no. 1 (June 30, 2021): 60–69. http://dx.doi.org/10.51767/jm1206.
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Behavioural finance is a new theoretical field which seeks to apply the understandings of the psychologists to recognize the behaviour of both investors and financial markets. It concentrates upon how investor is aware and acts on information to take investment decisions and that their behaviours reason them to make changed Selection about their financial decisions. Investors do not act sensibly in taking verdicts relating to investment. They have positive weaknesses like cognitive and emotional which take a predominating function in taking investment decision of individuals. They have behavioral biases in the event of taking investment decision. In this present paper researchers examines “Effect of Behvioral Biases on Investor’s Preference Regarding 80C Tax Saving Instruments in Surat City.”. Researcher has studied behavioral biases of investors investing in 80C tax saving instruments by conducting the survey with sample size of 100 investors through a wellstructured questionnaire in Surat city. The sampling method used was convenient sampling through personal survey method by contacting investors of Surat city. The purpose of this study was to find out behavioral biases of investors while investing in tax saving 80C instruments in Surat City.
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Mabry, Sibylle. "Tackling the Sustainability Dilemma: A Holistic Approach to Preparing Students for the Professional Organization." Business Communication Quarterly 74, no. 2 (April 13, 2011): 119–37. http://dx.doi.org/10.1177/1080569911404051.
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Increased knowledge of business sustainability as the basis of a holistic approach to value creation has inspired many managers to integrate ecological and social stewardship into their strategic business innovation plans. However, the coverage of sustainability issues in business courses remains small at many universities. This article illustrates how business communication students can become cognitively, behaviorally, and emotionally involved in the analysis and evaluation of the complex sustainability paradigm via an assignment focusing on sustainability. The approach integrates several levels of learning, stretching students’ cognitive skills and enhancing the emotional competencies and behavioral skills needed to enter high-level business jobs.
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Baker, H. Kent, Satish Kumar, Nisha Goyal, and Vidhu Gaur. "How financial literacy and demographic variables relate to behavioral biases." Managerial Finance 45, no. 1 (January 14, 2019): 124–46. http://dx.doi.org/10.1108/mf-01-2018-0003.
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PurposeThe purpose of this paper is to examine how financial literacy and demographic variables (gender, age, income level, education, occupation, marital status and investment experience) related to behavioral biases.Design/methodology/approachThe study uses one-way analysis of variance (ANOVA), factor analysis and multiple regression analysis to examine survey data from more than 500 individual investors in India.FindingsThe results reveal the presence of different behavioral biases including overconfidence and self-attribution, the disposition effect, anchoring bias, representativeness, mental accounting, emotional biases and herding among Indian investors. Hence, the findings support the view that individual investors do not always act rationally. The results also show that financial literacy has a negative association with the disposition effect and herding bias, a positive relation with mental accounting bias, but no significant relation with overconfidence and emotional biases. Age, occupation and investment experience are the most important demographic variables that relate to the behavioral biases of individual investors in the sample. Regarding gender, males are more overconfident than are females about their knowledge of the stock market.Research limitations/implicationsThe study does not test for causality, only association between the variables. Thus, the findings in this study should not be interpreted as suggesting causality. The study may have implications for financial educators in promoting the financial awareness programs for individuals. Financial advisors can potentially become more effective by understanding their clients’ decision-making processes.Originality/valueDespite an extensive literature on behavioral finance, limited academic research attempts to unravel the relation of how financial literacy and demographic variates relate to behavioral biases. This study contributes to this literature by trying to fill this gap.
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Dow, S. "The Psychology of Financial Markets: Keynes, Minsky and Emotional Finance." Voprosy Ekonomiki, no. 1 (January 20, 2010): 99–113. http://dx.doi.org/10.32609/0042-8736-2010-1-99-113.
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This paper is concerned with drawing on both psychology and economics in order to amplify the psychological content of Minskys account of the behaviour which leads up to financial turmoil, and market responses to it. In exploring recent developments in behavioural finance, the author finds that a crucial element is given inadequate attention: the motivation for action under uncertainty. Yet earlier traditions in economic thought (notably the Scottish Enlightenment thought) incorporated the role of psychological motivation under uncertainty. One can see this emerging again in Keyness analysis of financial behaviour, and again in Minskys financial instability hypothesis. The methodological features of their economic analysis are explored which allow this crucial psychological input to be present, focusing in particular on the role and meaning of rationality.
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Duxbury, Darren. "Behavioral finance: insights from experiments II: biases, moods and emotions." Review of Behavioral Finance 7, no. 2 (November 9, 2015): 151–75. http://dx.doi.org/10.1108/rbf-09-2015-0037.
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Purpose – The purpose of this second of two companion papers is to further review the insights provided by experimental studies examining financial decisions and market behavior. Design/methodology/approach – Focus is directed on those studies examining explicitly, or with direct implications for, the most robustly identified phenomena or stylized facts observed in behavioral finance. The themes for this second paper are biases, moods and emotions. Findings – Experiments complement the findings from empirical studies in behavioral finance by avoiding some of the limitations or assumptions implicit in such studies. Originality/value – The author synthesizes the valuable contribution made by experimental studies in extending the knowledge of how biases, moods and emotions influence the financial behavior of individuals, highlighting the role of experimental studies in policy design and intervention.
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Carroll, Emma, and David Marginson. "Relative performance information and social comparisons: Exploring managers' cognitive, emotional and dysfunctional behavioral processes." Management Accounting Research 53 (November 2021): 100768. http://dx.doi.org/10.1016/j.mar.2021.100768.
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Sedliačiková, Mariana, Patrik Aláč, and Mária Moresová. "How Behavioral Aspects Influence the Sustainable Financial Decisions of Shareholders: An Empirical Study and Proposal for a Relevant Decision-Making Concept." Sustainability 12, no. 12 (June 12, 2020): 4813. http://dx.doi.org/10.3390/su12124813.
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Behavioral finance is an area or sub-discipline of behavioral economics that examines the real financial behavior and decision-making of people, including the knowledge of psychology and sociology. The objective of this paper was to identify and investigate the impact of significant cognitive, psychological and emotional factors affecting the financial decision-making of the shareholders of woodworking and furniture manufacturing and trading enterprises. This could lead to the design of decision-making concepts which take into account not only cognitive but also psychological and emotional factors and their influences on decision-making process, which could positively affect the sustainable development of the aforementioned types of enterprises. The mapping of the addressed issue was carried out by means of an empirical survey in the practice of the Slovak woodworking and furniture manufacturing and trading enterprises in the form of a questionnaire. The results of the survey were evaluated by descriptive, graphical and mathematical-statistical methods. Conclusions and recommendations were formulated based on the identification of key behavioral aspects (knowledge, security, freedom and sadness), the implementation of which could contribute to eliminating negative deviations and errors in the financial decision-making process of shareholders of woodworking and furniture manufacturing and trading enterprises.
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BOGATYREV, Sergei Yu. "The sentiment analysis method in finance: The psychological-financial index." Finance and Credit 27, no. 3 (March 30, 2021): 561–84. http://dx.doi.org/10.24891/fc.27.3.561.
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Subject. The article discusses contemporary means of measuring emotions of those who make financial decisions. Objectives. Analyzing key means of sentiment analysis in Russia and abroad, the study is to create a tool, which would be applicable to valuation and provide the unbiased information about the emotional state of those who locally make financial decisions. I also demonstrate limited capabilities of contemporary information systems in terms of emotion measurement, valuation, and present means to address the imperfection of the existing news tone measurement framework, unveil the content of new emotion measurement techniques, which would be useful to appraisers and cost analysts. Methods. The study is based on the induction and deduction for opinion poll processing, narrative analysis in data environments. I display the nexus with new technological means of modern information systems. Results. The article unveils the substance of key methods for setting the psychological-financial index, modern means of sentiment analysis in the new setting of the digital economy and Big Data. I scrutinize key constituents of the psychological-financial index and its use in the current circumstances of the post-COVID-19 economy. The article shows how psychological measurement methods can be implemented as part of the narrative analysis. Conclusions and Relevance. Financial analysts get new opportunities when using new achievements of behavioral finance and modern psychological studies. As the use of the psychological-financial index shows in analyzing market anomalies, there appear more opportunities for explaining the irrational behavior of market agents in its various segments. New standards are set as they are needed for valuation purposes, when financial analysts use them. Reporting is normalized. I provide an outlook of the analytical apparatus development and new indicators to use valuation results more efficiently. The findings hereof are applicable to the practice of contemporary appraisers, cost and fundamental analysts. It is especially important to use sentiment analysis tools in the digital economy, during the instability and crisis, change in the market paradigm, market shifts, changes in the comparability metrics, distortion of traditional financial and economic indicators, market volatility. The use of the psychological-financial index supplements and expands the scope of classical measurement tools and increase the quality of valuation.
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Botoc, Claudiu, Eugen Mihancea, and Alin Molcut. "FOOTBALL AND STOCK MARKET PERFORMANCE CORRELATION: EVIDENCE FROM ITALY." Scientific Annals of Economics and Business 66, no. 4 (2019): 525–39. http://dx.doi.org/10.47743/saeb-2019-0044.
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The increasing growth of soccer economy is delivering new challenges for prospective investors in terms of stock price volatility. Such challenges are rooted in behavioral finance and efficient market hypotheses. Given this, the aim of our paper is to test the link between sport performance and correspondent stock price for the Italian listed football clubs (Juventus, Lazio, AS Roma). Our results suggest that soccer wins are likely to have a positive impact over stock price. This impact is more pronounced for local stocks and thus the findings have policy implications for emotional investors.
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KARPYSHYN, Natalia, and Solomia TABAKA. "BEHAVIORAL FINANCIAL DECISIONS OF THE POPULATION IN THE PROCESS OF CONSUMPTION." WORLD OF FINANCE, no. 3(64) (2020): 19–28. http://dx.doi.org/10.35774/sf2020.03.019.
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Introduction. The financial decision-making process depends not only on objective economic factors and motives; it is often under the influence of behavioural factors and subjective perceptions of situations. Consumption, as a continuous process of acquiring goods and services, has become an integral attribute of public life and a significant item of expenditure of personal and family budgets. Therefore, understanding the behavioural effects that affect the financial behaviour of consumers is an important step towards conscious consumption and rational spending of personal funds. The purpose is to theoretical analyse the influence of behavioral factors on the financial decisions of citizens in the field of consumption in order to reduce their negative effects and optimize consumer spending. Methods. System of general scientific and special research methods were used in the article. Methods of analysis, synthesis and generalization were used for the study of literary, statistical and Internet sources on the research topic; visualization method were used for visual presentation of the processed data; abstract-logical method - for generalize the presented material and formulate conclusions. The method of questionnaires and sampling, methods of statistical analysis and comparison were used for evaluate the financial decisions of households in Ukraine. Results. The article presents that using of an “intuitive” system of making financial decisions in the process consumption leads to unconscious and irrational spending of personal funds. The author generalized theories of behavioral finance and systematized the behavioral factors that influence citizens' financial decisions, namely: heuristics, emotions, framing, market influence, psychological accounting and loss perception. It has been proven that due to the lack of time for detailed information analysis, people make decisions under the influence of heuristics, such as the bandwagon effect, possession and anchoring. In such cases, money is spent irrationally and consumption becomes unconscious, as it is stimulated by marketing technologies and manipulations. Behavioral factors of emotional influence (excessive self-confidence and greed) also push the population to unjustified financial risks. Author offer to improve state policy in the field of management of personal financial resources in way to help citizens avoid the negative impact of behavioral factors and make informed financial decisions. Perspectives. The subject of further scientific research is the search and in-depth study of ways to effectively use personal funds in the field of lending and investing in the context of behavioral theories.
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Shelton, Victoria M., Thomas E. Smith, and Lisa S. Panisch. "Financial Therapy With Groups: A Case of the Five-Step Model." Journal of Financial Counseling and Planning 30, no. 1 (June 1, 2019): 18–26. http://dx.doi.org/10.1891/1052-3073.30.1.18.
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Financial therapy is used to address the psychological, emotional, and behavioral components involved in the process of learning and utilizing new financial literacy skills. This study describes the use of a manualized financial therapy financial therapy intervention, the Five-Step Model, as it is piloted in a group setting. Current economic theories support the use of an intervention model that differs from traditional financial literacy teachings. Behavioral economics and the Transtheoretical Model of Behavior Change is used as a foundation for the Five-Step Model. A case study illustrates the key principles and effectiveness of the intervention model. Reflections and feedback from the members of the group are provided, along with a discussion of implications and directions for further inquiry.
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Raheja, Saloni, and Babli Dhiman. "How do emotional intelligence and behavioral biases of investors determine their investment decisions?" Rajagiri Management Journal 14, no. 1 (May 4, 2020): 35–47. http://dx.doi.org/10.1108/ramj-12-2019-0027.
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Purpose In earlier studies, research has shown that EI is the only element, which influences the ways in which people develop in their lives, jobs and social skills control their emotions and get along with other people. It is EI that dictates the way people deal with one another and understand emotions. The research gap is to explore the impact of behavioral factors and investors psychology on their investment decision-making. Design/methodology/approach The information was gathered from 500 financial specialists. The region of research was the financial specialists who contribute through LSC Securities Ltd. in Punjab State. The purposive testing system was used in this examination. Findings The investigation found that the positive connection between the conduct predispositions of the financial specialists and venture choices of the speculators and positive connection between enthusiastic insight of the financial specialists and their venture choices. Yet, the authors found that the enthusiastic insight better foresees the venture choices of the financial specialists than the conduct predispositions of the speculators. Among the different elements of conduct inclinations of the speculator’s lament and carelessness are identified with the financial specialist’s venture choices. Among the various estimations of eager understanding – care, dealing with emotions, motivation, empathy and social aptitudes are related to the hypothesis decisions of the monetary pros. Research limitations/implications The sample selection was based on purposive sampling, rather than a random probability sample. The sample was area specific, restricted only to Ludhiana Stock Exchange in Punjab state. Therefore, the results of the study cannot be generalized with certainty to all the investors investing through other exchanges in other states. The inferences are based on the assumption that the data provided by the investors are true and correct. The findings may be relevant for other stock exchanges as that of the Ludhiana Stock Exchange. However, the authors do not claim the generalization of the results. Practical implications This study also helps to understand the relationship between investment decision-making and risk tolerance of investors. It will helpful for the financial advisors to know the behavioral biases of investors while making an investment decision, and therefore, they can advise investors properly to mitigate such biases. It may help the investors in understanding the subjective part of their behavior and control their emotions while taking decisions for their investment in stock market options. Social implications This research will help investment advisors and finance professionals to judge investors’ attitudes toward risk in a better way, which leads to better investment decisions. Originality/value This study is my own study and it is original and has not been published anywhere.
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Bogatyrev, Semen Yu. "THE DIAGRAM OF MOODS: THEORY AND REALITY." Vestnik of the Plekhanov Russian University of Economics, no. 3 (June 30, 2019): 17–29. http://dx.doi.org/10.21686/2413-2829-2019-3-17-29.
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The article studies the issue of identifying business market value in deals on merges and acquisitions, which is connected with identifying the discount rate by using the method of cash flows discounting. During the post-crisis period after 2009 not only Russian value analysts but also overseas ones have been facing this problem. Only now we can observe a sharp increase in the Federal Reserve System rate, though not long ago valuers did not know how to build the discount rate with the negative figures of the interest rate in Europe and its minimum figures in the US. This research investigates the problem from the point of view of behavioral finance. Crisis and prosperous years are analyzed in view of the emotional background, which gives a certain line in shaping the mood of M & A market participants. To solve the problem value assessment was carried out by the method of cash flow discounting of a great number of Russian banks put up for sale and later quantitative methods of finance decision-making were applied for processing numerous findings. The novelty of obtained findings is connected with the fact that today methods of behavioral research are not used in finance practice and in scientific developments in Russia. They are rather limited abroad. Theoretical works, which formed the foundation for the empiric research, were used earlier by foreign scientists at the stock exchange. Such research is a pioneer on the Russian M & A market.
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Metawa, Noura, M. Kabir Hassan, Saad Metawa, and M. Faisal Safa. "Impact of behavioral factors on investors’ financial decisions: case of the Egyptian stock market." International Journal of Islamic and Middle Eastern Finance and Management 12, no. 1 (March 4, 2019): 30–55. http://dx.doi.org/10.1108/imefm-12-2017-0333.
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Purpose This paper aims to investigate the relationship between investors’ demographic characteristics (age, gender, education level and experience) and their investment decisions through behavioral factors (sentiment, overconfidence, overreaction and underreaction and herd behavior) as mediator variables in the Egyptian stock market. Design/methodology/approach This paper collects data from a structured questionnaire survey carried out among 384 local Egyptian, foreign, institutional and individual investors. This paper used a partial multiple regression method to analyze the effect of investors’ demographic characteristics on investment decisions through behavioral factors as the mediator variable. Findings Investor sentiment, overreaction and underreaction, overconfidence and herd behavior significantly affect investment decisions. Also, age, gender and the level of education have significant positive effects on investment decisions by investors. Experience does not play a significant role in investment decisions, but as investors gain experience, they tend to overlook the emotional factors. Practical implications The findings of this paper would help to understand common behavioral patterns of investors and indicate a path toward the growth of the Egyptian stock market. Originality/value There is a lack of research in behavioral finance covering Middle East and North African markets. This paper attempts to fulfill the gap by analyzing behavioral factors in the Egyptian market.
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Jurevičienė, Daiva, and Olga Ivanova. "BEHAVIOURAL FINANCE: THEORY AND SURVEY / FINANSINĖ ELGSENA: TEORIJA IR TYRIMAS." Mokslas - Lietuvos ateitis 5, no. 1 (April 5, 2013): 53–58. http://dx.doi.org/10.3846/mla.2013.08.
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Abstract 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. Santrauka Straipsnyje nagrinėjama finansinės gyventojų elgsenos teorijų svarba priimant namų ūkių finansinius sprendimus. Finansinės gyventojų elgsenos teorijos tyrinėja rinkos dalyvių emocines charakteristikas, siekiant paaiškinti subjektyvias iracionalias anomalijas finansų rinkose. Straipsnyje išnagrinėtos gyventojų elgsenos teorijos, suklasifikuoti pagrindiniai elgsenos nukrypimai, priimant finansinius sprendimus, ir aprašytos jų pritaikymo finansų rinkoje galimybės. Tyrimo tikslas – nustatyti pagrindinius finansinės elgsenos bruožus ir polinkius sąsajoje su namų ūkių finansiniais sprendimais. Siekiant nustatyti namų ūkių finansinę elgseną buvo atlikta finansiškai išprususių individų apklausa. Straipsnis anglų kalba.
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Foroughi, Behzad, Davoud Nikbin, Sunghyup Sean Hyun, and Mohamad Iranmanesh. "Impact of core product quality on sport fans’ emotions and behavioral intentions." International Journal of Sports Marketing and Sponsorship 17, no. 2 (April 29, 2016): 110–29. http://dx.doi.org/10.1108/ijsms-04-2016-010.
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Purpose – The purpose of this paper is to examine the relationships among the core product quality (team characteristics and player performance), emotion (anxiety, anger, dejection, happiness, and excitement), and the fans behavioral intentions. Design/methodology/approach – Data were gathered on the team characteristics and player performance, emotions of anxiety, anger, dejection, happiness, and excitement using a survey from subjects comprised of 233 spectators attending Iranian Premier League soccer matches. Findings – The results showed that both the core product quality dimensions of the team characteristics and player performance are related significantly to the negative emotion of anxiety and both positive emotions of excitement and happiness. Moreover, the positive emotions of excitement and happiness were positively related to the fan attendance, while the negative emotions of anxiety and dejection were negatively and significantly related to the fans behavioral intentions. The practical implications of the findings are discussed briefly. Originality/value – The paper provides useful information for sports marketing executives, suggesting that they strive for unique organizational advantages and employ them in their marketing messages when their teams are unsuccessful. Such a strategy can allow organizations to maximize the positive emotions of spectators in the face of poor core product quality.
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Shafqat, Sayed Ibtasam, and Imran Riaz Malik. "ROLE OF REGRET AVERSION AND LOSS AVERSION EMOTIONAL BIASES IN DETERMINING INDIVIDUAL INVESTORS’ TRADING FREQUENCY: MODERATING EFFECTS OF RISK PERCEPTION." Humanities & Social Sciences Reviews 9, no. 3 (June 29, 2021): 1373–86. http://dx.doi.org/10.18510/hssr.2021.93137.
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Purpose: This study aims to investigate the moderating effect of risk perception on the relationship among emotional biases (i.e., regret aversion and loss aversion) and the trading frequency of individual investors in the context of the Pakistan Stock Exchange (PSX).
Approach / Methodology: This study is conducted under the philosophical assumptions of the positivist paradigm and the approach is deductive. The convenience sampling technique is used for sample selection of registered individual investors on the database of PSX. This led the study towards designing a cross-sectional study. Furthermore, 384 questionnaires are used for the collection of primary data from a population of 0.22 million registered PSX individual investors. The direction and degree of relationship among variables of concern are analyzed by the multiple linear regression techniques. The structural Equation Modelling (SEM) technique is used for authentication of moderation results.
Findings: The results depict that regret aversion and loss aversion have statistically significant and negative impacts on individual investors’ trading frequency. Whereas, risk perception has an insignificant & positive impact on individual investors’ trading frequency. Moreover, risk perception is found to moderate the relationship between these two emotional behavioral biases.
Originality/Value: This current study is a pioneer in developing links between individual investors’ trading frequency, loss aversion, regret aversion, and risk perception. The article also contributes to the literature of behavioral finance, specifically while understanding the role of emotional biases in investment strategies. So, this article engenders the reader's thoughtfulness to find plausible explanations in minimizing the impact of emotional biases in trading frequency and decision-making of individual investors.
Implications: This study implies that emotional biases and risk perception cause and moderate the magnitude of the trading frequency of individual investors. The regulatory bodies such as the Securities and Exchange Commission of Pakistan (SECP) and PSX can launch training programs for individual investors to train them in coping up with such emotional biases and risk perception. This might result in the enhancement of the market capitalization of the stock market.
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Barclay, Laurie J., and Tina Kiefer. "Approach or Avoid? Exploring Overall Justice and the Differential Effects of Positive and Negative Emotions." Journal of Management 40, no. 7 (April 27, 2012): 1857–98. http://dx.doi.org/10.1177/0149206312441833.
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As empirical research exploring the relationship between justice and emotion has accumulated, there have been key questions that have remained unanswered and theoretical inconsistencies that have emerged. In this article, the authors address several of these gaps, including whether overall justice relates to both positive and negative emotions and whether both sets of emotions mediate the relationship between overall justice and behavioral outcomes. They also reconcile theoretical inconsistencies related to the differential effects of positive and negative emotions on behavioral outcomes (i.e., performance, withdrawal, and helping). Across two field studies (Study 1 is a cross-sectional study with multirater data, N = 136; Study 2 is a longitudinal study, N = 451), positive emotions consistently mediated the relationship between overall justice and approach-related behaviors (i.e., performance and helping), whereas negative emotions consistently mediated the relationship between overall justice and avoidance-related behaviors (i.e., withdrawal). Mixed results were found for negative emotions and approach-related behaviors (i.e., performance and helping), which indicated the importance of considering context, time, and target of the behavior. The authors discuss the theoretical implications for the asymmetric and broaden-and-build theories of emotion as well as the importance of simultaneously examining both positive and negative emotions.
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Lee, Hyun-Woo, Heetae Cho, Emily Lasko, Jun Woo Kim, and Woong Kwon. "From knowing the game to enjoying the game: EEG/ERP assessment of emotional processing." International Journal of Sports Marketing and Sponsorship 21, no. 2 (April 2, 2020): 305–23. http://dx.doi.org/10.1108/ijsms-11-2018-0119.
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PurposeIn highlighting brain wave responses of emotional processing, the purpose of this study is to investigate (1) the effect of sport participation involvement on affective reaction in viewing photos; and (2) the association between affective reaction and behavioral intentions.Design/methodology/approachUsing lateralized event-related potentials, the authors examined how brain wave reactions are different based on different sport involvement between two groups where one group had varsity sport experience while the other expressed that they were not fans of the sport.FindingsResults indicated a significant difference in lateralization between groups. Brain responses were greater in the high involvement group and positively correlated with the intention to attend future games.Originality/valueThe findings in this study elucidate the linkage between one's history of sport involvement and affective brain wave responses. Implications from neurophysiological evidence provide means to further dissect the multifaceted construct of involvement in the field of sport marketing.
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ALtom Shihabeldeen, Hassabelrasul Yusuuf. "Using Text Mining to Predicate Exchange Rates with Sentiment Indicators." Journal of Business Theory and Practice 7, no. 2 (March 22, 2019): p60. http://dx.doi.org/10.22158/jbtp.v7n2p60.
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Recent innovations in text mining facilitate the use of novel data for sentiment analysis related to financial markets, and promise new approaches to the field of behavioral finance. Traditionally, text mining has allowed a near-real time analysis of available news feeds. The recent dissemination of web 2.0 has seen a drastic increase of user participation, providing comments on websites, social networks and blogs, creating a novel source of rich and personal sentiment data potentially of value to behavioral finance. This study explores the efficacy of using novel sentiment indicators from Market Psych, which analyses social media in addition to newsfeeds to quantify various levels of individual’s emotions, as a predictor for financial time series returns of the Australian Dollar (AUD)-US Dollar (USD) exchange rate. As one of the first studies evaluating both news and social media sentiment indicators as explanatory variables for linear and nonlinear regression algorithms, our study aims to make an original contribution to behavioral finance, combining technical and behavioral aspects of model building. An empirical out-of-sample evaluation with multiple input structures compares Multivariate Linear Regression models (MLR) with multilayer perceptron (MLP) neural networks for descriptive modelling. The results indicate that sentiment indicators are explanatory for market movements of exchange rate returns, with nonlinear MLPs showing superior accuracy over linear regression models with a directional out-of-sample accuracy of 60.26% using cross validation.
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Zahera, Syed Aliya, and Rohit Bansal. "Do investors exhibit behavioral biases in investment decision making? A systematic review." Qualitative Research in Financial Markets 10, no. 2 (May 8, 2018): 210–51. http://dx.doi.org/10.1108/qrfm-04-2017-0028.
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Purpose The purpose of this paper is to study and describe several biases in investment decision-making through the review of research articles in the area of behavioral finance. It also includes some of the analytical and foundational work and how this has progressed over the years to make behavioral finance an established and specific area of study. The study includes behavioral patterns of individual investors, institutional investors and financial advisors. Design/methodology/approach The research papers are analyzed on the basis of searching the keywords related to behavioral finance on various published journals, conference proceedings, working papers and some other published books. These papers are collected over a period of year’s right from the time when the most introductory paper was published (1979) that contributed this area a basic foundation till the most recent papers (2016). These articles are segregated into biases wise, year-wise, country-wise and author wise. All research tools that have been used by authors related to primary and secondary data have also been included into our table. Findings A new era of understanding of human emotions, behavior and sentiments has been started which was earlier dominated by the study of financial markets. Moreover, this area is not only attracting the, attention of academicians but also of the various corporates, financial intermediaries and entrepreneurs thus adding to its importance. The study is more inclined toward the study of individual and institutional investors and financial advisors’ investors but the behavior of intermediaries through which some of them invest should be focused upon, narrowing down population into various variables, targeting the expanding economies to reap some unexplained theories. This study has identified 17 different types of biases and also summarized in the form of tables. Research limitations/implications The study is based on some of the most recent findings to have a quick overview of the latest work carried out in this area. So far very few extensive review papers have been published to highlight the research work in the area of behavioral finance. This study will be helpful for new researches in this field and to identify the areas where possible work can be done. Practical implications Practical implication of the research is that companies, policymakers and issuers of securities can watch out of investors’ interest before issuing securities into the market. Social implications Under the Social Implication, investors can recognize several behavioral biases, take sound investment decisions and can also minimize their risk. Originality/value The essence of this paper is the identification of 17 types of biases and the literature related to them. The study is based on both, the literature on investment decisions and the biases in investment decision-making. Such study is less prevalent in the developing country like India. This paper does not only focus on the basic principles of behavioral finance but also explain some emerging concepts and theories of behavioral finance. Thus, the paper generates interest in the readers to find the solutions to minimize the effect of biases in decision-making.
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Sedliacikova, Mariana, Maria Moresova, Patrik Alac, and Josef Drabek. "How Do Behavioral Aspects Affect the Financial Decisions of Managers and the Competitiveness of Enterprises?" Journal of Competitiveness 13, no. 2 (June 30, 2021): 99–116. http://dx.doi.org/10.7441/joc.2021.02.06.
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Decisions of financial managers can improve the competitiveness of the enterprise. Decisions are affected not only by knowledge and experience but also by emotional and cognitive deviations in behavior. Considering the role of competitiveness, this paper investigated whether an effect of behavioral factors on the financial decision-making of managers can be shown, and if so, to what degree. The aim of the paper is to propose a concept, the essence of which is to determine the key systematically-occurring errors in the financial decision-making process of managers rising from the effect of the human factor as a basis of prevention of incorrect financial decisions. The issue was mapped in the territory of the Visegrad Four (V4) by means of an empirical survey by the method of a questionnaire. By evaluating the research, the methodology of statistical hypotheses testing by measures of association was used (contingency coefficients - Cramer’s contingency coefficient V and Pearson’s contingency coefficient C) and Pearson’s chi-square test. The results of the research allow the formulation of conclusions that expand current knowledge in the field of research. The main results of the conducted research are that the key behavioral aspects (cognitive, psychological and emotional) that influence the financial decision-making process of business managers in the V4 countries are love, sadness and hate. A concept was created from the achieved results, the application of which in the enterprises of the V4 countries can help managers avoid making improper financial decisions which could have a negative impact on the financial health and competitiveness of an enterprise.
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Brandi, Julius. "Emotionen, Behavioral Finance und Animal Spirits. Konventionelle Wirtschaftstheorie oder Chance für eine kritische Analyse des Finanzmarkts." Soziologiemagazin 7, no. 2 (November 20, 2014): 47–66. http://dx.doi.org/10.3224/soz.v7i2.17014.
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Zainudin, Nurul Farhana Binti, and Zakiah Binti Mohamad Ashari. "A Meta-Analysis: The Effects of Child Sexual Abuse Towards Children." Asian Social Science 14, no. 11 (October 22, 2018): 69. http://dx.doi.org/10.5539/ass.v14n11p69.
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Recently, cases of sexual abuse against children became a phenomena and it is a traumatic events that give a deep impact towards the victim. Therefore, the purpose of this study was to conduct a meta- analysis on a published researched about effects of child sexual abuse towards children. There were 20 journal articles collected from Science Direct, SpringerLink, Willey Online Library and Web of Science databases with the keywords ‘child sexual abused’ ‘behavior’, ‘emotional’, ‘social’ and ‘academic’ being used. The year of papers selected were from 2010 until 2017. The researcher differentiated and analyzed the effect of child sexual abuse toward four themes: internalizing and externalizing behavior, emotional regulation, suicidal behavior and academic achievement and performance. The findings from this study shown that child with previous experiences as victims in child abuse display internalizing and externalizing behavior and poor on academic achievement and performance. The findings also shown that the sexually abused children especially girls has low emotional regulation and the victims also had suicidal ideation and suicidal attempt. The implication from this study was to provide the insight for future researchers on the effects of child sexual abuse in behavior, emotional, social and academic aspects. Since this study only focused on the effect of sexual abuse towards children, it was suggested that for future researches, the effects of sexual abuse towards different range of age such as adult with history of sexual abused should be further investigated and more effects apart from behavioral, emotional, social and academic should be considered.
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Quaicoe, Alexander, and Paul Quaisie Eleke-Aboagye. "Behavioral factors affecting investment decision-making in bank stocks on the Ghana stock exchange." Qualitative Research in Financial Markets 13, no. 4 (June 9, 2021): 425–39. http://dx.doi.org/10.1108/qrfm-05-2020-0084.
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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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Gupta, BIndu, Davinder Singh, Kaushik Jandhyala, and Shweta Bhatt. "Self-monitoring, Cultural Training and Prior International Work Experience as Predictors of Cultural Intelligence - a Study of Indian Expatriates." Organizations and Markets in Emerging Economies 4, no. 1 (May 31, 2013): 56–71. http://dx.doi.org/10.15388/omee.2013.4.1.14259.
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The present study examined the role of self-monitoring, expatriate training, and prior international work experience on the cultural intelligence of expatriates. The data was collected from 223 Indian expatriates through a questionnaire survey. The results of data analysis indicated that self-monitoring has a significant impact on the cultural intelligence of the expatriates. Further analysis was done to examine the effect of these independent variables on individual dimensions of cultural intelligence. The findings signify that self-monitoring has a significant effect on all the three cultural dimensions, namely, cognitive, emotional/motivational and behavioral, and that expatriate training has a significant impact on the emotional/motivational dimension, but not on the other two. Prior international work experience was found not to have a significant effect on cultural intelligence and its dimensions. These findings provide significant insights into organizations for selecting and training the expatriates leading to their effective adjustment and performance in a different culture context. This paper contributes to expatriate management literature highlighting the effect of personality variables along with expatriate training. Further, it is a contribution to the research in cultural intelligence which is a relatively nascent area of research.
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Ermisch, John. "Origins of Social Immobility and Inequality: Parenting and Early Child Development." National Institute Economic Review 205 (July 2008): 62–71. http://dx.doi.org/10.1177/0027950108096589.
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There is growing evidence that differences in children's intellectual, emotional and behavioural development by parents' socio-economic status emerge at early ages and that these differences cast a long shadow over subsequent achievements. This article demonstrates with the Millennium Cohort Study that differences by parents‘ income group in cognitive and behavioural development emerge by the child's third birthday. It shows that an important part of these differences can be accounted for by ‘what parents do’ in terms of educational activities and parenting style.
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Noh, Young-Eun, Tony Morris, and Mark B. Andersen. "Occupational Stress and Coping Strategies of Professional Ballet Dancers in Korea." Medical Problems of Performing Artists 24, no. 3 (September 1, 2009): 124–34. http://dx.doi.org/10.21091/mppa.2009.3027.
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Twenty professional ballet dancers from Korea were interviewed to identify the stressors they experience and the coping strategies they use during practice and performance. Inductive content analysis of the data identified four major sources of stress: physical (i.e., physical appearance, poor physical condition), psychological (i.e., desire, slump, personality), interpersonal (i.e., relationship with a dance director, relationship with other dancers), and situational factors (i.e., performance demands, finances). The results demonstrated that, within physical factors, physical appearance (e.g., maintaining a particular body type, keeping low body weight) was a preeminent problem. We also found three general dimensions for coping: psychological strategies (i.e., individual cognitive and emotional strategies, avoidance strategies), behavioral strategies (i.e., dysfunctional behavior, hobby activities, social interaction, dance-related behavior), and physical relaxation. The coping strategies mentioned most frequently were in the behavioral strategies dimension. Identifying sources of stress and coping strategies in dance can provide a basis for intervention programs, which can help to reduce stress by developing effective coping skills.
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McNamee, Paul, Silvia Mendolia, and Oleg Yerokhin. "Social media use and emotional and behavioural outcomes in adolescence: Evidence from British longitudinal data." Economics & Human Biology 41 (May 2021): 100992. http://dx.doi.org/10.1016/j.ehb.2021.100992.
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Mukhopadhyay, Partha, and Partha Pratim Sengupta. "Decision-Making Process of Farmers' in Present Political Economy of Agrarian Crisis with a Study of Burdwan District of West Bengal, India." International Journal of Sustainable Economies Management 6, no. 1 (January 2017): 96–113. http://dx.doi.org/10.4018/ijsem.2017010106.
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The agricultural sector is less contributing sector than service and manufacturing sector in terms of share in the total GDP in India. For last two decades, farmers suicide in India has been. The question is how the individual farmers are taking such drastic decision. Decision-making process is the most complex function of any individuals. But the judgment is influenced by a number of factors like emotion, mania, framing bias etc. By combining behavioral and cognitive psychological theory with conventional economics and finance, Behavioral Economics seeks to provide explanation for peoples' decision-making process such as economic decision. Recently, Burdwan District has become the news headlines for farmers' suicide. In this study the authors have been applying Behavioral theories to the farmers' decision-making process to find the influencing variable(s) and by factor analysis and Structural Equation Modelling. It is found that only Herding effect and Market information have strongly influenced the decision-making process of the farmers of the said district.
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Miendlarzewska, Ewa A., Michael Kometer, and Kerstin Preuschoff. "Neurofinance." Organizational Research Methods 22, no. 1 (September 15, 2017): 196–222. http://dx.doi.org/10.1177/1094428117730891.
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Neurofinance is a relatively new area of research that strives to understand financial decision making by combining insights from psychology and neuroscience with theories of finance. Using behavioral experiments, neurofinance studies how we evaluate information about financial options that are uncertain, time-constrained, risky, and strategic in nature and how financial decisions are influenced by emotions, psychological biases, stress, and individual differences (such as gender, genes, neuroanatomy, and personality). In addition, it studies how the brain processes financial information and how individual decisions arise within it. Finally, by combining these experiments with computational models, neurofinance aims to provide an alternative explanation for the apparent failure of classic finance theories. Here we provide an introduction to neurofinance and look at how it is rooted in different fields of study. We review early findings and implications and conclude with open questions in neurofinance.
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Gómez-Martínez, Raúl, Camila Marqués-Bogliani, and Jessica Paule-Vianez. "The profitability of algorithmic trading systems based on football sentiment." International Sports Studies 42, no. 1 (June 22, 2020): 33–46. http://dx.doi.org/10.30819/iss.42-1.04.
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Behavioural finance has shown that investment decisions are the result of not just rational but also emotional brain processes. On the assumption that emotions affect financial markets, it would seem likely that football results might have a measurable effect on financial markets. To test this, this study describes three algorithmic trading systems based exclusively on the results of three top European football teams (Juventus, Bayern München and Paris St Germain) opening long or short positions in the next market season of the futures market of the index of each country (MIB (Milano Italia Borsa), DAX (Deutscher Aktien Index) and CAC (Cotation Assistée en Continu). Depending on the outcome of the last game played a long position was taken after a victory and a short position after a draw or defeat. The results showed that the algorithmic systems were profitable in the case of Juventus and Bayern whereas in the case of PSG, the system was profitable, but in an inverse way. This study shows that investment strategies that take account of sports sentiment could have a profitable outcome.
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Arshi, Tahseen, Venkoba Rao, Kamal Qazi, Vazeerjan Begum, Mansoor ALSabahi, and Syed Ali Ahmed. "A Biopsychosocial Perspective of User-Generated Innovation in Open Innovation Models: A Moderated-Mediation Analysis." Journal of Open Innovation: Technology, Market, and Complexity 7, no. 2 (May 11, 2021): 131. http://dx.doi.org/10.3390/joitmc7020131.
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User-generated innovation has contributed to the growth of the democratization of open-innovation models. One of the most common forms of user-generated innovation is evident on social media platforms. The purpose of this study is to investigate nonpecuniary motivations that drive innovation among user innovators on social media platforms. Furthermore, the study examines the underlying sociopsychological and biological dispositions that influence nonpecuniary motivation. The experimental and control group consisted of 204 user innovators on different social media platforms who filled out a self-reporting questionnaire in this exploratory research design. The study assessed endocrinal biomarkers through a proxy measure of 2D:4D ratio associated with behavioral, emotional, and social behavior. It developed a moderated-mediation model evaluating the indirect conditional relationships through a regression-based analysis with bootstrapped estimations. The findings support the moderated-mediation model, indicating that nonpecuniary motivation primarily explains user innovator behavior. Hedonic emotions, characterized by aesthetics, experiential enjoyment, and satisfaction-related feelings, mediate this relationship. A critical finding of the study is that endocrinal testosterone moderates this mediated relationship. This study is the first to apply a biopsychosocial lens to examine motivational drives influencing user-generated innovation using a moderated-mediation model. It contributes to understanding user innovators’ tricky motivational purposes, emphasizing the role of human agency in advancing the open-innovation agenda.
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Dinç Aydemir, Sibel, and Selim Aren. "Do the effects of individual factors on financial risk-taking behavior diversify with financial literacy?" Kybernetes 46, no. 10 (November 6, 2017): 1706–34. http://dx.doi.org/10.1108/k-10-2016-0281.
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Purpose This study aims to examine the roles of individual factors on risky investment intention as an indicator of risky financial behavior. Design/methodology/approach The data were collected from a survey instrument and composed of 496 individuals’ responses. The authors exploited structural equation modelling and multigroup structural equation modelling for direct and indirect effects, respectively. Findings Results indicate that emotional intelligence and locus of control have a positive impact on financial risk-taking, while risk aversion in general has the negative one. Although financial literacy does not have a direct effect on risky financial behavior, it has important role as a moderator variable, interacting with external locus of control. Originality/value The authors expect this study to contribute into behavioral finance literature in two ways. First, they investigate joint and relative effects of four major factors (i.e. emotional intelligence, locus of control, risk aversion in general and financial literacy) identified in the literature on financial risk-taking of individual investors. Each belongs to a different venue in an individual’s psyche and therefore is expected to influence financial risk-taking through different mechanisms. However, the research arguing their roles on the financial risky behavior directly is very limited. Investigating their individual effects is likely to provide unique insights into our understanding of risky financial behavior. Second, the authors also posit and manifest that the effects of the first three of the aforementioned factors on risk-taking intentions are moderated by financial literacy. This finding is likely to provide rather valuable insights pertaining to the emergence of risk-taking behaviors and may shed light on the root reasons behind equivocal findings in previous research regarding the effect of each factor.
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Grecucci, Alessandro, Cinzia Giorgetta, Sara Lorandini, Alan G. Sanfey, and Nicolao Bonini. "Changing decisions by changing emotions: Behavioral and physiological evidence of two emotion regulation strategies." Journal of Neuroscience, Psychology, and Economics 13, no. 3 (September 2020): 178–89. http://dx.doi.org/10.1037/npe0000130.
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Oprean, Camelia. "Knowledge Capital – Influenced By Rationality Or Animal Spirits?" Balkan Region Conference on Engineering and Business Education 1, no. 1 (August 15, 2014): 347–52. http://dx.doi.org/10.2478/cplbu-2014-0052.
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AbstractIt is already a well-accepted concept in expansion, the economy, organization and management based on knowledge. It is said that the owners of knowledge, respectively the individual, organization and the society, will hold the power in the future. Thus, the knowledge become the economic and personal basic resource and all the activities from the economic sphere are prevailingly concentrated on the treatment of information and producing of knowledge goods. However, it is still difficult to explain on a strict scientific basis why people behave non-rational when facing with money decisions. Classic finance foundation lays on strict rationality and optimization of financial decisions. We affirm that monetary and financial decisions are significantly influenced by psychological factors. Behavioural Finance adds to the equation the psychological and emotional facets of the human decision. This emerging discipline has challenged the Efficient Market Hypothesis, arguing that markets are not rational, but are driven by fear and greed instead. The paper proposes a critical analysis, based on consistency criteria, regarding the controversy current state of the informational efficiency theory of the capital market. In this sense, the critical approach is one that shows the weaknesses, the vulnerable aspects that characterize the classical form of EMH theory. Also, the paper highlights the most significant criticisms levelled against EMH by psychologists and behavioural economists.