Disposition Effect Research Papers - Academia.edu (original) (raw)

2025, BEYOND RATIONALITY: ASSESSING BEHAVIOUR BIASES' INFLUENCE ON STOCK MARKET INVESTORS

This study investigates the impact of specific behavioral biases on stock market investment decisions, focusing on overconfidence, herd behavior, availability bias, representativeness, disposition effect, loss aversion, and anchoring. Utilizing a Likert-scale survey, we measured the prevalence and intensity of these biases among a diverse group of stock market investors. Our findings reveal that certain biases, particularly overconfidence and herd behavior, significantly influence investment decisions, often leading to patterns of irrational trading and market inefficiencies. This research underscores the critical need for investors and financial advisors to recognize and mitigate the effects of these biases to enhance decision-making processes. The practical implications of our study suggest strategies for behavioral adjustments that can potentially shield investors from making suboptimal decisions driven by psychological biases. The originality of this study lies in its methodological approach and its contribution to the existing literature by quantifying how deeply embedded these biases are in the decision-making processes of individual investors. This paper not only advances the theoretical framework of behavioral finance but also provides empirical evidence that can be used to develop more effective investor education and behavioral intervention strategies.

2025, Journal of Financial Research

Experimental studies in behavioral finance historically have confirmed that subjects are highly influenced by reference points when making economic decisions. A recent study by analyzed the dynamics of reference price formation using experimental methods with subjects forming reference prices for stocks based on observed price sequences. Their study helps to clarify behavioral effects of past prices on reference price formation but it does not consider contextual information. We extend the BWW study by adding market price information as background to the experiment, and we investigate how this additional information affects reference point formation and updating. Our overarching hypothesis is that if the market background information has no impact then it should not alter the results of BWW; otherwise, the additional market information should be an explanatory variable for the reference point. Our results confirm the hypothesis that market information matters. We also investigate the impact of pessimism and optimism on reference prices by the combining the BWW framework with a model of disappointment aversion and anticipatory feelings developed by Gollier and Muerman (2010). Our study fills a void in the literature by providing new evidence on the impact of contextual market information on reference point formation in an investment setting.

2025, Journal of emerging technologies and innovative research

The interplay and linkage between the domains of Management And Psychology have always been a zone of inquisitiveness for management & behavior scientists. Whether one speaks of work management or self management , cognitive capacities of the person does have a huge role to play in the same , which is just not confined to the Intelligence Quotient of the person but something way broader than that.Similarly , when it comes to analysing ones ‘ financial behavior much like the other dimensions of behaviour , the contribution of the field of Psychology cannot be undermined. Hence , this research paper , via extensive literature review tends to explore the the interplay of the various cognitive blocks which tends to affect ones ‘ financial behavior. IndexTerms Cognitive Blocks , Perception , Heuristics , Attribution Errors , Cognitive Dissonance , Biases .

2025, Tuijin Jishu/Journal of Propulsion Technology

Behaviour finance helps to understand the attitude and perception of investors on their investment decisions. Every investor differs from others in all the aspects due to a range of factors like demographic and socioeconomic background. An optimal investment decision plays a vital role and is a major deliberation. This paper analyses the role of herding behaviour on Indian mutual fund investors. By referring to psychology and pointing out the imperfections of a human mind, it reveals mistakes committed by both individual and professional investors. This study captures the impact of herding behavior and overconfidence biases on the investors' decision-making in India The proposed study will collects the necessary data through questionnaires distributed among 113 respondents who were investing in mutual fund. The results show that overconfidence and herding bias have significant positive impact on investment decision. Overall results conclude that individual investors have limited knowledge and more prone towards making psychological errors. The findings of the study also indicate the existence of these four behavioral biases on individual investment decisions. This study will be helpful to financial intermediaries to advice their clients.

2025

entertaining office mates Aniol, Davide, Benedetto, Tomas and Toni that made ours the best PhD office. I am also grateful to Petya and Joro for fighting Stata with me, to Aniol, Julian and Geronimo for helping me with the experiments and to Davide for solving my random IT issues. Barcelona was an amazing place to explore with all of you. Thanks to Gerry for encouraging me to cross the finish line. And to my Mum, Dad and my brother for simply everything. I dedicate this thesis to them.

2025, Perspektif (Lembaga Penelitian dan Pengabdian pada Masyarakat Akademi Manajemen Informatika & Komputer Bina Sarana Informatika)

Abstrak -Bertahan dengan kerugian adalah bias perilaku yang umum ditemukan dalam investasi. Investasi juga memasuki babak baru dengan jenis-jenis aset modern dan canggih. Salah satu aset modern dan canggih tersebut dikenal sebagai cryptocurrencies. Artikel ini ditulis dengan tujuan untuk mendeteksi apakah terjadi efek disposisi dan fenomena investor crypto yang bertahan dengan kerugian mereka. Efek disposisi dalam penelitian ini bersifat persepsional dan sebagai tambahan dianalisis juga pengaruh bias perilaku seperti overconfidence, regret aversion, risk tolerance serta literasi keuangan pada fenomena bertahan dengan kerugian tapi menjual dengan cepat tersebut. Hasil penelitian menemukan efek disposisi secara statistik deskriptif tapi gagal mengkonfirmasi pengaruh variabel bebas dengan menggunakan regresi linear berganda pada efek disposisi. Menariknya, secara deskriptif literasi keuangan responden cenderung rendah tapi berani berinvestasi pada aset yang memiliki volatilitas yang tinggi seperti cryptocurrencies. Tidak ditemukannya pengaruh literasi keuangan, overconfidence, regret aversion, dan risk tolerance terhadap efek disposisi persepsional para pembeli cryptocurrencies diduga disebabkan oleh faktor emosional loss aversion. Hal ini membuat individu enggan untuk merealisasikan kerugian dan berharap aset akan kembali pada titik awal pembelian. Tentunya hal ini bukti pembuktian lebih lanjut pada pengembangan model berikutnya. Keterbatasan yang lain adalah sample dengan literasi keuangan sejenis menjadi salah satu ruang pengembangan, jika memang penelitian ini ingin dikembangkan pada responden yang lebih heterogen. Selain itu pendekatan penelitian yang berbasis eksperimen bisa menjadi area penelitian yang menjanjikan untuk meneliti bias perilaku di masa depan.

2025

The evolving domain of finance, the fusion of artificial intelligence (AI) and machine learning (ML) is revolutionizing traditional investment strategies. This paper explores how intelligent systems can analyse investor behaviour, predict decision-making patterns, and adapt portfolio strategies accordingly. By studying both historical financial data and real-time behavioural indicators, AI and ML models can identify trends in market movement as well as anticipate the emotional and cognitive biases influencing an individual's investment decisions. The proposed system integrates predictive algorithms with behavioural analytics to recommend tailored investment with both market conditions and user tendencies. Our research introduces a framework that evaluates investor profiles using sentiment analysis, past actions, and decision consistency to classify risk behaviour dynamically. This enables the system to suggest personalized strategies that evolve with the user's financial habits and goals. Experimental results indicate a significant improvement in investment accuracy, reduced risk exposure, and higher satisfaction among users when compared to static advisory models. By incorporating behavioural modelling into investment technologies, this study highlights the potential for AI-driven platforms to support smarter, more adaptive financial planning in a rapidly changing economic environment.

2025, Asia-pacific Financial Markets

Investment behavior is influenced by various behavioral biases. Two among them are disposition effect and anchoring. Using market level data, we investigate the presence of disposition effect in Indian stock markets. Initially, it was found that high (low) trading volumes are not associated with winner (loser) stocks. Further based on the evidence provided by studies done on market level data, we consider abnormal trading volumes as the proxy for disposition effect. Investors' tendency to update their reference points and the prominence of historical prices (anchors) as reference points allowed a study to test the association between abnormal trading volumes and historical prices. Except for familiar and highly liquid stocks (Nifty50 index stocks) this study found that abnormal trading volumes are associated with a significantly more percentage of winning days than that of losing days. This study is useful for investors and fund managers while taking trading decisions and also when forming the portfolios. Disposition effect • Anchoring • Abnormal trading volumes • Historical prices and 52-week prices JEL Classification G40 • G41 * Sravani Bharandev

2025, Review of Behavioral Finance

Purpose The purpose of this paper is to test the disposition effect at market level and propose an appropriate reference point for testing disposition at market level. Design/methodology/approach This is an empirical study conducted on 500 index stocks of NSE500 (National Stock Exchange). Winning and losing days for each stock are calculated using 52-week high and low prices as reference points. To test disposition effect, abnormal trading volumes of stocks are regressed on their percentage of winning (losing) days. Further using ANOVA, the difference between mean of percentage of winning (losing) days of high abnormal trading volume deciles and low abnormal trading volume deciles is tested. Findings Results show that a stock’s abnormal trading volume is positively influenced by the percentage of winning days whereas percentage of losing days show no such effect. Findings are consistent even after controlling for volatility and liquidity. ANOVA results show the presence of high perc...

2025, Asia-Pacific Financial Markets

2025, International Journal of Cultural Studies and Social Sciences

The findings of this study reveal that overconfidence bias plays a role in influencing investment decisions in mutual funds, among investors residing in Surat City. According to research gathered from a group of investors responses in a survey study discovered that when investors are overly confident, in their ability to forecast market trends they tend to engage in behaviors like frequent trading and underestimating market risks. This inflated self-assurance can have effects on the performance of investment portfolios. Ultimately leading to unfavorable financial results. Recognizing this tendency towards overconfidence can enable both investors and financial advisors to devise strategies that promote decision-making and minimize the impact of overconfidence on investments, in mutual funds.

2025, Social Science Research Network

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2025, Annals of Operations Research

2025

The Indian stock market has emerged as a prominent avenue for wealth generation and economic participation, underpinned by its vibrant equity culture and robust regulatory framework. Despite this growth, retail investors in India demonstrate a cautious approach towards equity investment, influenced significantly by their perception of risk. Risk perception, a multifaceted construct shaped by psychological, demographic, and market-related factors, directly affects investment behavior and market participation. This research paper examines the risk perception of retail investors in the Indian stock market, focusing on the interplay of demographic variables such as age, income, and education, along with psychological biases like loss aversion, overconfidence, and herd behavior. The study adopts a mixed-method approach, incorporating quantitative surveys and qualitative interviews with 100 retail investors from diverse socioeconomic backgrounds. Statistical tools and thematic analysis reveal how financial literacy, market volatility, and past experiences influence risk attitudes. Findings indicate that younger and higher-income investors display a greater propensity for risk, whereas loss aversion and limited financial literacy deter participation. Furthermore, external shocks, such as market crashes during the COVID-19 pandemic, exacerbate risk perception, underscoring the need for resilience-building strategies. This paper highlights the importance of targeted financial education, regulatory reforms, and technological innovations in mitigating risk perception barriers. It provides actionable recommendations for policymakers, market regulators, and financial institutions to foster greater retail participation, thereby contributing to a more inclusive and resilient financial ecosystem. The insights gleaned from this research aim to bridge the gap between perceived and actual risks, empowering retail investors to make informed equity investment decisions.

2025

Th is study offers empirical insights into investor behavior and its correlation with various behavioral biases in the context of investment decisions in the Pakistan Stock Exchange (PSX). Data was collected through a structured questionnaire from 261 individual investors in Pakistan. The study employs hierarchical regression analysis to test the hypothesis. It considers several behavioral biases, and statistically, anchoring and adjustment, overconfidence, and herding show a significant impact. The study uses financial literacy to examine its moderating effects on these biases, and the result suggests that it significantly influences behavioral biases related to investment decisions. The results underscore the unique investment behaviors in emerging markets, contrasting with established norms in well-developed financial markets. These findings can inform policymakers and stock market authorities about investor decision-making in emerging economies.

2025, Research and Humanities in Medical Education

Web based conversational forums have gained momentum as an aid to clinical decision making. This paper, written in an empirical explanatory manner, attempts to understand the flow of information and the process of sense-making in one such... more

2025, Journal of Service, Innovation and Sustainable Development

Intraday trading, a global stock market strategy, involves buying and selling securities within a day to profit from short-term price movements. This study explores how technological evolution and service innovation influence investor behavior in adopting intraday trading in Nepal's stock market. Utilizing survey data from 226 respondents in Kathmandu Valley, the study employs Structural Equation Modeling (SEM) to analyze behavioral biases, including heuristics, prospect theory, market conditions, and herding effects. The findings reveal that herding behavior significantly impacts trading decisions, as investors heavily rely on external information from peers and social media rather than fundamental analysis. Unlike developed markets where heuristics and prospect behaviors dominate, these factors exhibit minimal influence in Nepal, reflecting a unique market environment shaped by limited financial literacy and regulatory inefficiencies. Additionally, the study identifies major structural challenges, such as technological limitations in the Trading Management System (TMS), inadequate brokerage support, and lack of investor awareness, which hinder effective trading participation. The results indicate that 80.09% of traders prefer intraday transactions, while 61.06% express interest in broker-provided facilities. Despite the growing appeal of intraday trading, inefficiencies and regulatory gaps persist as major challenges. The study recommends enhancing financial literacy, improving NEPSE's technological infrastructure, and implementing regulatory reforms to facilitate a more efficient and transparent trading environment. Future research should explore demographic variations in trading behavior, compare Nepal's market with similar economies, and assess the impact of digital financial innovations on intraday trading adoption.

2025

This paper explores the concept of behavioral finance, focusing on various biases that influence investors and decision-makers' behaviors. It discusses how biases such as overconfidence, loss aversion, and herding behavior affect financial decision-making processes. By analyzing empirical studies and providing real-world examples, this research highlights the importance of understanding these biases to enhance better decision-making strategies. Through an examination of case studies and experimental results, the findings emphasize the need for improved investor education and strategic frameworks for better financial outcomes.

2025, Revue Française d'Economie et de Gestion

En nous basant sur une méthodologie issue de la finance expérimentale et l’utilisation d’outils qualitatifs d’analyse, nous étudions le comportement et les décisions prises par huit étudiants en situation de trading continu durant trois journées. L’objectif de l’article est d’observer le développement de certains biais classiquement envisagés pour les investisseurs individuels sur les marchés boursiers. Notre attention se portera plus spécifiquement sur les comportements moutonniers et les décisions induites. À cette fin, nous nous concentrerons sur une annonce particulière, à savoir celle des résultats annuels de l’entreprise LVMH le 28 janvier 2025 après la clôture des marchés. Nous montrerons, d’une part, les différents éléments qui laissent à penser que certains mouvements boursiers positifs auraient dû être observés à l’annonce de cet événement. Ces éléments semblent avoir permis le développement d’un sentiment de marché positif à l’égard du titre. D’autre part, celui-ci puise également sa source de l’intense couverture médiatique assurée par les sites boursiers. Les différents témoignages écrits permettent de démontrer que les participants ont essayé de coller à la manière avec laquelle les marchés se comportaient (sans nécessairement s’interroger sur le bienfondé de ce sentiment), ont été fortement influencés par les flux informationnels délivrés par les sites boursiers (notamment au travers des annonces des analystes financiers) et que la réalité de certaines annonces (des performances moins élevées que prévues) a favorisé le développement de phénomènes de retrait. Nos résultats démontrent la pertinence d’une analyse plus poussée des cadres émotionnels pour comprendre les processus décisionnels sur les marchés boursiers.

2025, The impact of overconfidence on stock market valuation: An empirical study on listed firms

How to cite this paper: Pham, M. T., & Do, P. T. (2024). The impact of overconfidence on stock market valuation: An empirical study on listed firms [Special issue].

2025, Pacific-Basin Finance Journal

The paper investigates the trading behaviour of all investors (initial subscribers and those who acquire shares in the aftermarket) in 419 Australian IPOs listed between December 1995 and December 2000. We access electronic share register records for each company to investigate whether initial subscribers flip their allocations during the first three, ten and 35 days of trading, and relate this flipping behaviour to firm characteristics. We find that flipping only accounts for a small proportion of aftermarket trading volume, with day trades comprising more than 50% of trading volume. We also show that IPO subscribers often reacquire a substantial proportion of shares that they have previously flipped. We find strong support for the representative heuristic (i.e., flipping is highest when previous IPOs with similar characteristics are highly underpriced) as a determinant to flipping behaviour. In accordance with the representative heuristic we infer that flipping behaviour is driven by investors who subscribe with an intention to flip IPOs they expect to be highly underpriced. Support is also found for underpricing and ex ante risk as determinants of flipping, while mild support is found for underwriter quality as a determinant of flipping. We also find that the flipping behaviour of large (informed) investors is unrelated to IPO long-run returns, while uninformed investors consistently flip more of the IPOs that have better long-run returns.

2025, Journal of Shanghai Jiaotong University

The Stock market plays a significant role in the growth of themanufacturing and service industries of the country. The deep and liquid markets have a profound and pervasive impact on our economy. It facilitates the conversion of savings into equity investments tosupport the booming economy. Stock price movements have a profoundpsychological impact on the individual investor and businesses. The stockmarket is the story of the human behavior that is responsible for overreactionin both directions (Klarman 1991). The present study is made to determine the impact of personality traits, investor'sattitude bias towards investor's behaviour and to measure the direct and indirect effectsof the variables relating to personality traits, investors attitude bias towardsinvestors behavior.

2025, Decyzje

The disposition effect is an effect whereby investors tend to sell winning stocks and tend to hold losing stocks. This inclination is detrimental for investment results. showed the impact of the probability of further stock price rise under low stock price volatility on the disposition effect. Specifically, they showed that under low volatility, in the case of a gain, the investor is more likely to sell the winner even if the probability of the further gain is high, whereas in the case of a loss, the investor is more likely to hold the loser even when the probability of a further gain is small. In this paper we examined the disposition effect under high volatility. The general conclusion is that under high volatility, in the case of a gain, the investor behaves in the same way as for low volatility, whereas in the case of a loss, the investor is less and less likely to hold the loser as volatility increases. Thus, in the case of a loss under high volatility, the investor acts contrary to the disposition effect. This result explains the panic selling of stocks during a market collapse.

2025, SSRN Electronic Journal

The disposition effect is known as the reluctance of investors to realize losses and their eagerness to realize gains. The aim of the present research was to examine the impact of the disposition effect at the aggregate (market) level. In order to limit the number of factors affecting the selling decision on the share exchange, the examination was done on Initial Public Offerings. The main factor determining the volume of turnover on the first trading day should be the initial rate of return. Our research shows that a higher turnover volume is associated with a positive initial rate of return and a lower turnover volume associated with a negative initial rate of return. This phenomenon can be explained by the disposition effect. We conduct our research on the emerging market in Poland. The Warsaw Stock Exchange has been recently the second largest IPO market in Europe, after London.

2025, Turkish Journal of Physiotherapy and Rehabilitation

The aim of the research is to study the impact of personality traits and demographic characteristics on the risk tolerance and investment decisions of individuals. The study involves consideration of nine independent variables, among which 5 comprises of big five personality and four demographic factors. The five personality traits are Extroversion, Agreeableness, Conscientiousness, Neuroticism and Openness to Experience. The four demographic factors considered are age, gender, financial literacy and investment experience. Investment decisions act as a dependent variable and the risk tolerance play a mediating role in this study. For this purpose, a questionnaire is constructed (measuring big five personalities, risk tolerance level and investment decisions) and circulated among the investors of TNPFC and business graduate students. The primary data collected for research purpose is analysed using SPSS software. The data was analysed using multiple linear regression techniques. Ten hypotheses were formed to study the impact of each independent variable on the dependent variable. And it was found that the major variables i.e. personality traits had a significant impact on the investor's decision making.

2025, Journal of Banking and Finance

2025, Journal of Banking & Finance

This study uses a database of over 6 million trades from a large European brokerage house to investigate the stock repurchase behavior of individual investors from 1999 to 2006. Running survival analysis techniques, we show at an individual level that the duration between a sale and a repurchase is shorter when the investor has had a positive experience with the stock or when the stock has lost value since being sold. More sophisticated investors are significantly less prone to this behavior. Our findings emphasize the importance of regret in financial decisions. Public and private information, tax considerations and contrarian strategy do not drive repurchase behavior.

2025, Revue d'économie politique

2025, SSRN Electronic Journal

We investigate the presence of the disposition effect for 90 244 individual investors using a unique large brokerage account database between 1999 and 2006. Our main results show that individual investors demonstrate a strong preference for realizing their winning stocks rather than their losing ones. However, the fiscal impact in France appears to be moderate relative to the one observed in other countries. Taking French specificities such as, the way short sales are realized and the existence of tax free account (PEA account) into account, show that: a) the behavioral bias is not eliminated for sophisticated individual investors; b) the change of "tax account type" does not imply any change in investors' behavior JEL Classification : G 10 Résumé Nous étudions la présence d'un effet de disposition pour 90 244 investisseurs individuels français à partir d'une base de données de transactions individuelles sur la période 1999-2006. Les principaux résultats montrent que ces investisseurs ont une préférence marquée pour la réalisation de leurs gains plutôt que de leurs pertes. L'impact fiscal semble en France plus modéré que dans d'autres pays En outre, l'existence de possibilités de ventes à découvert (SRD) et de comptes PEA en France permet de mettre en lumière de façon originale a) la persistance de ce biais pour des investisseurs sophistiqués et b) le faible impact du régime fiscal sur le comportement des investisseurs.

2025, SSRN Electronic Journal

This paper analyses the disposition effect at an individual level by studying the trading records of 20 379 investors over 1999-2006. As in previous studies, we confirm a huge heterogeneity among investors and we propose to explain these differences on the basis of financial sophistication and trading behavior proxies. Originally, we use direct sophistication variables: trading of foreign assets, derivative assets and bonds and trading on both tax-free and traditional accounts. We show that these variables reduce significantly the level of the disposition effect. Furthermore, based on a dynamic panel data analysis, we question the ability of investors to correct their bias over time. Results show that individual investor's disposition effect decreases over time and that our sophistication variables play a role in the decrease.

2025, SSRN Electronic Journal

2025, Working Papers of LaRGE ( …

Many financial puzzles have been solved, at least partially, by the introduction of alternative assumptions on the behaviour of investors. Cumulative prospect theory and mental accounting are two such approaches which are used in this... more

2025, journal of infrastructure policy and development

The successful execution of large-scale infrastructure projects is essential for economic growth and societal development, but these projects are too often beset with financial risks. The main financial risks related to infrastructure projects, including cost overrun, funding uncertainty, currency fluctuation, and regulatory change are examined in this research. The study identifies and assesses the magnitude and frequency of these risks by combining surveys and analysis of financial reports. The findings show that current risk management strategies, including hedging, contingency funds, and public-private partnerships, are often unsuitable to respond to the specific needs of financial uncertainties. The research suggests the need for an all-encompassing financial risk management framework that relies on real-time data analysis and a cocktail of risk assessment tools. Additionally, the development of strategic tailored approaches to address financial risk recovery depends on proactive stakeholder engagement. This research complements the existing literature on risk management in infrastructure projects by highlighting the financial dimensions of risk management and suggesting future research on advanced financial tools and technologies. Ultimately, large-scale infrastructure project sustainability and success contribute to economic stability and societal well-being can only be achieved through effective financial risk management.

2024

Examined were causal attritutiors fcr woven and men and sports'participation. In accord with previous academic research, athletes of= both sexes were expected to attribute successes more to their abilities and efforts and failures to lack of effort, as compared)to a group of non-athletes. Also examined was the differential use of team-and individual attributions ky sales and females. Male college athletes`(N=50) and female college athletes (N=33) were administered an attribution gde-sticnnaire. Hale 0=37) and female (N=17) psychology students served as the control. Results analyted with a t-test and analysis of variance indicated that the majority of attributions were team 'attributions; .athlete attributions were 'unstable with great use of effort and mood attributions; female athletes tended to attribute their outcomes differently from male athletet;'college athletes tended to be more loyal to their teams than non-athletei; and sex differences in attritutional patterns tended to override the factor of being an athlete. Results suggested that college athletes do not have,strcng,differences from other college stude,pts in the way they view sports; rather, the major differences 'Mx* between men and women. (KA)

2024, The International Journal of Business & Management

Based on a qualitative methodology inspired by experimental finance, we analyzed to which extent behavioral and cognitive biases could develop in a differentiated way according to the gender of investors. To do this, we considered a sample of 17 students in a two-hour continuous trading situation. Our results, obtained by collecting descriptive socio-demographic data, reading trading journals and answering closed questionnaires, confirm the findings of many studies devoted to this issue. They show that women trade more carefully, with higher levels of diversification than men. Beyond this result, we also demonstrate the importance of women's greater use of heuristics, which raises the question-not necessarily resolved in the scientific literature-of the influence of intuition and instinct on decision-making processes. This twofold observation seems to us even more important given that women's financial portfolios were the best valued in the deteriorated stock market context of the experiment. We also argue that the chronic male overrepresentation in trading rooms could be a facilitating element in the development of speculative bubbles.

2024, International Journal of Scientific & Technology Research

The study is investigating conventional and behavioral pricing multifactor impact on price fragility from the equity market of Pakistan. The impact of conventional factors is significant on price fragility. The recent research has not covered the desired scope of such a relationship due to several issues, such as sample size, lack of database resources, and systematic reviews. Moreover, the available literature on price fragility is very limited. In the Pakistan Stock Exchange (PSX), there is an immense need to develop a corporate culture to promote standard modern financial practices to enhance financial productivity and sustainability. The current research having theoretical framework is valuable and provides information about pricing multifactor impact on price fragility in reference to Pakistan. Method: The positivist approach is used as a research paradigm. In this correlational study, the probability sampling was used. While systematic sampling was used for data collection of PSX, the sample was tested parallel to the mean-variance random walk theory. Results: It was found that the factors of value, size, Illiquidity, and Price earning premium are significantly (P< 0.01) affecting the price fragility. Findings and Conclusions: Specifically, the herd behavior and disposition effects are found to be insignificant. However, the size, value, liquidity, and price earning resulted in a significant impact on the price fragility in the short run. For the corporate culture, sound corporate governance boards should be established, family governance system should be replaced by an independent democratic board. Mispricing and arbitragers require serious control. The study discusses implications in the light of results for the prosperity of PSX. Keywords: Equity Price, Price Fragility, Conventional, Herd behavior, Systematic Sampling, PSX, disposition effects Paper link: http://www.ijstr.org/final-print/nov2019/Relationship-Between-Multi-factor-Pricing-And-Equity-Price-Fragility-Evidence-From-Pakistan.pdf

2024, Journal of Behavioral Finance

This paper describes how some investors exhibit risk discrepancies when managing household portfolios. The study extends the risk discrepancy modeling literature by documenting (a) the extent to which elicited-portfolio risk is congruent with revealed-portfolio risk and (b) the role financial advisors play in aligning investor elicited-and revealed-portfolio risk. Results show that elicited-portfolio risk is significantly higher than revealed-portfolio risk. While estimating of elicited-portfolio risk are nearly identical, revealed-portfolio risk differs between those who make their own investment decisions and those who rely on a financial advisor. This study's findings support the notion that investors exhibit risk discrepancies when managing their portfolios.

2024

Educators are becoming .increasingly concerned with social .psychological variables affecting classroom behavior.. This study attempts to determine if the achidvement attribution model is supported in an actual classroom setting with college students actually taking an important exam. Participants were 35 volunteers from an introductory social psychology course. Three short questionnaires were completed: one pre-test, one post,-test but before the student knew the test score, and tb/.third after the individual test scores and class distribution of scores were returned. The students did slightly worse than they expected or warted to do. The majority attributed the cause of their exam outcome tc Effort. The results gave only limited support for the attribution model of expectancy changes being mediated by the stability cf the causal attribution. Affett and self-reward were positively correlated with effort and ability ratings.. Contrary to prediction, e highest correlations were not for the intentional effort at ribution but rather for ability. Affect_ and self-reward ,were mor related to subjective appraisals of success than objective per ormarce. The results showed that the theoretical attribution mod I was generally supported, but suggested a far more complex model of attributions'in the classroom than originally expected. (Author/JL)

2024, EAI

This study explores how investor behavior and financial literacy influence capital market investment decisions. Using a quantitative approach, the study collects data via questionnaires from investors registered at the IDX investment gallery of Muhammadiyah University of Makassar. Purposive sampling is applied to select individuals actively investing in the capital market. Multiple linear regression analysis, conducted with SPSS software, is used for data analysis. Results reveal a positive and significant effect of financial literacy on investment decisions, as indicated by a significant value of 0.000 < 0.05 and a t-value of 4.201, exceeding the t-table value of 1.985. Additionally, investor behavior characteristics positively and significantly impact investment choices, with a t-value of 5.448, also greater than 1.985, and a significant level of 0.000. Thus, both financial literacy and investor behavior play crucial roles in shaping investment decisions.

2024

The aversion to loss realization phenomena and the tendency for selling the winners soon while holding the losers for long; the “disposition effect” might result in affecting management decisions. This study is conducted for examining the link between behavioral finance factors i.e.: regret aversion, self-control and mental accounting with portfolio management while keeping the disposition effect as mediator. In order to find out the empirical evidences, survey from fund managers has been conducted using the structured questionnaire. SPSS tool is being used to test the linear regression analysis and a total of 55 sample size is being taken in the study. Findings of the study confirmed there exists significant mediator impact of disposition effect between thethree aspects and the portfolio management. However, the significance and the objectives of the study have also been discussed.
Keywords:Regret Aversion; Mental Accounting; Self-Control; Disposition Effect; Portfolio Management.

2024

The aversion to loss realization phenomena and the tendency for selling the winners soon while holding the losers for long; the “disposition effect” might result in affecting management decisions. This study is conducted for examining the link between behavioral finance factors i.e.: regret aversion, self-control and mental accounting with portfolio management while keeping the disposition effect as mediator. In order to find out the empirical evidences, survey from fund managers has been conducted using the structured questionnaire. SPSS tool is being used to test the linear regression analysis and a total of 55 sample size is being taken in the study. Findings of the study confirmed there exists significant mediator impact of disposition effect between the three aspects and the portfolio management. However, the significance and the objectives of the study have also been discussed.
Keywords: Regret Aversion; Mental Accounting; Self-Control; Disposition Effect; Portfolio Management.

2024, International Journal Advanced Research

Purpose- The paper aims to compile and synthesize past and present
research on Behavioral Finance by reviewing the available literature.
This will provide quick and easy access for future researchers and for
doctoral thesis. The study emphasizes the classification of literature to
offer a comprehensive view of Behavioral Finance, analyzing the
findings and results of various studies for a thorough review.
Design/Methodology/Approach- A comprehensive search was
conducted across a variety of sources to review the existing literature
on Behavioral Finance. From thousands of papers, 64 were selected for
the present study, focusing on the impact of behavioral biases on
individual investors' decisions and the influence of demographic factors
on these biases. These selected papers, which include both research
studies and literature reviews, form the sample for this study. To assess
the status of research on the topic, these papers are classified based on
various variables, such as behavioral biases, investors' investment
decisions, and demographic factors Social factors and economic factors
on investment.
Findings -This paper categorizes the existing literature on Behavioral
Finance and finds that research in this field continues to be highly
sought after in developed countries. Additionally, the study notes a
significant increase in Behavioral Finance research in emerging
economies in recent years. Several other important findings were also
uncovered in the analysis.
Originality/Value- This paper offers a comprehensive collection and
classification of literature on Behavioral Finance, providing valuable
insights for academicians, professionals, and future researchers. It
serves as a useful resource for understanding current research trends
and identifying potential areas for future investigation in the field.

2024, ARBITRASE

Dalam tiga dekade terakhir, studi tentang perilaku keuangan telah menjadi subjek yang menarik. Menurut Thaler (1980), investor dapat dipengaruhi oleh bias perilaku yang seringkali menghasilkan keputusan yang kurang optimal. Seiring waktu, para sarjana telah menentang gagasan dan asumsi keuangan dan keuangan kontemporer normal, tetapi teori keuangan perilaku juga telah dipertanyakan dan menghadapi banyak kesulitan. Dalam teori Efficient Market Hypothesis (EMH), perilaku investor yang rasional di pasar keuangan diasumsikan (Fama, 1970). Menurut teori utilitas yang diantisipasi, investor berperilaku rasional ketika membuat keputusan dengan menimbang imbalan dan bahaya relatif dari semua alternatif (Kahneman & Tversky, 1979). Perilaku keuangan adalah bagaimana individu berperilaku dalam masalah keuangan dan pengaruh psikologis pada keputusan keuangan (Nofsinger, 2001). Metadata database Dimensions diekstraksi untuk penyelidikan ini pada 15 Juli 2022. Dimensions adalah agregator metadata yang kurang dikenal dibandingkan Scopus dan Web of Science; Database Dimensi adalah database akademik yang mengumpulkan artikel penelitian dan kutipannya, serta penghargaan, paten, penelitian klinis, dokumen kebijakan, dan informasi altmetrik. Basis data ini bertujuan untuk merekam dan memberikan wawasan tentang komunitas penelitian yang lebih luas (Bode et al., 2019). Dua artikel tentang bias perilaku dan pengambilan keputusan keuangan awalnya diterbitkan pada tahun 1999, menurut hasil pencarian. Permintaan penelitian di bidang ini mulai stabil antara tahun 1999 dan 2022, sedangkan jumlah publikasi terus meningkat dari tahun 2007 hingga 2022. Selain itu, peta pengembangan publikasi berbasis co-occurrence mencakup tujuh klaster. literasi keuangan, efek disposisi, dan risiko adalah isu-isu penelitian kontemporer.

2024

Mes premiers remerciements s'adressent à Madame Le Professeur Isabelle MARTINEZ pour son encadrement tout au long de ces années. Son exigence, sa disponibilité et ses précieuses recommandations m'ont été un soutien déterminant dans la finalisation de ce travail. Je souhaite lui manifester mon profond respect. J'exprime également mes remerciements à Monsieur le Professeur Pascal BARNETO et à Madame le Professeur Véronique BESSIÈRE de m'avoir fait l'honneur d'être les rapporteurs de cette thèse. Je leur exprime ma profonde gratitude. J'adresse mes plus sincères remerciements à Messieurs les Professeurs Bruno AMANN et Sébastien POUGET qui ont examiné ce travail et accepté de participer au jury de thèse. Je tiens à remercier Monsieur le Professeur Guillaume BIOT-PAQUEROT pour sa participation à l'évaluation de ma thèse ainsi que pour ses précieux conseils. Mes remerciements s'adressent aux enseignants-chercheurs du Groupe Sup de Co La Rochelle qui ont participé à une session test, réalisée dans le cadre de cette recherche, afin de vérifier la programmation effectuée avec le logiciel z-Tree et le déroulement d'une expérience en laboratoire. Les recommandations qui m'ont été adressées m'ont aidé considérablement à avancer sur cette thèse. Mes remerciements s'adressent aussi à Mansour DALY pour son assistance dans la programmation sur le logiciel Matlab ainsi qu'à Rodney BEARD, Liang GUO et Ridha ETTBIB pour leur aide dans la réalisation des statistiques sur le logiciel Eviews. Je souhaite également adresser mes remerciements à Martine MAIRAND pour ses relectures minutieuses ainsi qu'à Anthony MILOUDI, David SALVETAT et Noureddine SELMI pour leurs conseils et leurs encouragements. Je tiens enfin à exprimer toute ma gratitude à ma famille et plus particulièrement à mes parents qui m'ont soutenu tout au long de la thèse. Qu'ils trouvent ici l'expression de ma sincère gratitude. Un merci spécial à Amal pour sa présence pendant les moments de doute, son soutien, et surtout sa patience. Ikenberry et Ramnath, 2002). Les études citées ci-dessus se situent dans un cadre descriptif en analysant les rendements anormaux sur des fenêtres d'événement comportant plusieurs mois. Si les investisseurs sous-réagissent à l'information, alors la correction de cette erreur d'évaluation initiale aura lieu pendant les mois qui suivent l'événement. La finance comportementale essaie cependant d'expliquer la sous-réaction à l'information en reposant sur le comportement des investisseurs et les limites à l'arbitrage. Grinblatt et Han (2005) suggèrent que l'explication de cette anomalie repose sur les préférences des investisseurs et proposent un modèle qui se base sur l'effet de disposition. Selon ce modèle, l'effet de disposition altère la formation des prix et crée une sous-réaction à l'information. Notre recherche a pour objet l'étude de la réaction des investisseurs à l'arrivée d'une nouvelle information. Son principal objectif est de tester l'existence de sousréaction à l'information et de vérifier si celle-ci est fonction de l'effet de disposition. Dans ce cadre, la question de recherche est formulée comme suit: La sous-réaction des investisseurs à l'information est-elle due à l'effet de disposition ? L'existence de rentabilités anormales sur des fenêtres d'évènement comportant plusieurs mois après l'annonce montre que l'information est intégrée graduellement dans les cours, ce qui implique une sous-réaction au moment de l'annonce. Les méthodes empiriques classiques, celle d'étude d'évènements par exemple, se basent d'efficience à cette poche d'inefficience. Le deuxième chapitre porte sur une revue de la littérature en finance comportementale. Les notions de rationalité limitée des investisseurs, les limites à l'arbitrage, les heuristiques ainsi que les modèles théoriques qui ont expliqué la sousréaction à l'information sont abordés. Nous décrivons ensuite l'effet de disposition et les travaux qui ont contribué à la détection de ce phénomène sur les marchés financiers. Enfin, le modèle de Grinblatt et Han (2005) ainsi que les études empiriques qui ont rapproché l'effet de disposition et la sous-réaction à l'information sont présentés. La deuxième partie expose l'étude empirique. Elle a pour objectif de répondre à la question de recherche. Deux chapitres composent cette deuxième partie. Le troisième chapitre est consacré à la présentation de la méthodologie suivie. Il développe le protocole expérimental mis en place en décrivant la structure d'échange, le choix des sujets et le système d'incitation. Il expose aussi les variables étudiées et la méthode d'analyse des données expérimentales. Enfin, le quatrième chapitre expose les résultats de l'étude empirique. D'abord, une analyse descriptive portant sur l'efficience informationnelle est exposée. Ensuite, la

2024, Corporate Ownership and Control

The purpose of this paper is to explain the underreaction of investors to information. In order to study the adjustment of prices to a fundamental value, we implement experimental markets with fluctuating fundamental values. The experimental design employed involves two treatments differentiated according to the information disclosed to the participants. The results show an underreaction to a change in the fundamental value. This underreaction is greatest when most of the subjects are facing a paper loss. This suggests that the disposition effect has a strong impact on price formation. Once most of the subjects are in a paper gain situation, the underreaction is at its lowest level when they receive good news. Thus, underreaction to information is influenced by paper gains and losses.

2024, Corporate Ownership and Control