The Role Of Risk Propensity In Mediating The Influence Of Financial Behavioral Bias On Investment Performance Moderated By Financial Literacy
Keywords:
Financial Behavioral Bias, Financial Cognitive Bias, Financial Emotional Bias, Risk Propensity, Financial Literacy, Investment Performance, Individual Investors.Abstract
Financial behavioral biases including financial cognitive bias and financial emotional bias, risk propensity and financial literacy are important factors in improving investment performance. By considering the role of each of these factors, investors can make the right decisions and encourage the achievement of investment performance in investors who are active in the Indonesia Stock Exchange representative of Southeast Sulawesi. This study uses a quantitative approach using the SEM PLS analysis tool with Smart PLS 4.0. This study was conducted using a survey method using a questionnaire to 391 investors spread across 17 districts/cities in Southeast Sulawesi province. This study uses panel data, sampling through the probability random sampling method, then determining the sample size through the proportional allocation method. The results of the study indicate that: 1) financial behavioral bias, namely financial cognitive bias and financial emotional bias have a positive and significant effect on risk propensity and investment performance; 2) Risk propensity is proven to act as a mediator in the relationship between financial behavioral bias and investment performance; 3) Financial cognitive bias has a negative effect on investment performance; 4) Financial emotional bias has a positive effect on Investment Performance; 5) Risk propensity has a positive and significant effect on investment performance; 6) The role of financial literacy has a negative and insignificant effect in moderating the effect of risk propensity on investment performance; 7) Financial literacy has a positive and significant effect on investment performance. These findings emphasize the importance of understanding behavioral bias in investment decision making and the role of financial literacy in improving investment performance. This study provides policy implications for practitioners and individual investors
Downloads
Metrics
References
Abdin, S. Z.ul., F. Qureshi, J. Iqbal, S. Sultana, N. (2022). Overconfidence bias and investment performance: A mediating effect of risk propensity. www.sciencedirect.com. Available online at Borsa Istanbul Review http://www.elsevier.com/journals/borsa-istanbul-review/2214-8450
Abdin, S. Z., Farooq Ul, O., Sultana, N., & Farooq, M. (2017). The impact of heuristics on investment decision and performance: Exploring multiple mediation mechanisms. Research in International Business and Finance, 42, 674–688.Abdin et al., 2017
Abhinandan (2022) Impact of Influenced Behavioral Biases on Investment Decision.
Ackert, L. F., Church, B. K., Tompkins, J., & Zhang, P. (2005). What is in a name? An experimental examination of investment behavior. Review of Finance, 9 (2), 281–304.
Adil, M., Singh, Y., & Ansari, M. S. (2021). How financial literacy moderate the association between behaviour biases and investment decision? Asian Journal of Accounting Research, https://doi.org/10.1108/ajar-09-2020-0086
Ahmad (2020) Personality traits as predictor of cognitive biases: moderating role of risk-attitude. https://www.emerald.com/insight/1755-4179.htm
Ahmad, M., & Maochun, Z. (2019). Personality traits and investor decisions. Asian Journal of Economics, Finance and Management, 19–34.
Ahmed, Rasool & Saleem (2022) Mediating Role of Risk Perception Between Behavioral Biases and Investor’s Investment Decisions. SAGE Open April-June:18. Journals.sagepub.com/home/ DOI:10.1177/21582440221097394
Ajzen, I. (1991), The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211.
Ajzen, I., Fishbein, M. (1980), Theory of reasoned action/Theory of planned behavior. Social Psychology, 2007, 67-98. Available from: http://www.hsc.usf.edu/~kmbrown/TRA_TPB.htm.
Akhtar, F., & Das, N. (2020). Investor personality and investment performance: From the perspective of psychological traits. Qualitative Research in Financial Markets, 12(3), 333–352.
Alleyne, P., Broome, T. (2011), Using the theory of planned behaviour and risk propensity to measure investment intentions among future investors. Journal of Eastern Caribbean Studies, 36(1), 1-20.
Alleyne, P. (2011). Using the theory of planned behaviour and risk propensity to measure investment intentions among future investors. Journal of Eastern Caribbean Studies, 36(1), 1–21.
Anum & Beenish Ameer (2017) Behavioural Factors and their Impact on Individual Investors Decision Making and Investment Performance: Empirical Investigation from Pakistani Stock Market. Global Journal of Management & Business Research: Finance Vol. 17 Issue 1 Version 1.0 Publisher: Global Journals Inc. ISSN: 2249-4588 & Print ISSN: 0975-5853
Anderson, C., & Galinsky, A. D. (2006). Power, optimism, and risk-taking. European Journal of Social Psychology, 36(4), 511–536.
Atkinson, A. dan Messy, F.-A. (2012) “Measuring Financial Literacy,” Journal of Consumer Affairs, 44(2), hal. 296–316. January. DOI:10.1787/20797117
Bachmann, K., De Giorgi, E. G., and Hens, T., (2018). Behavioral Finance for Private Banking from the Art of Advice to the Science of Advice. Second Edition. Published by John Wiley & Sons, Inc, Hoboken, New Jersey.
Bachmann, K., & Hens, T. (2016). Is there Swiss in investment decision behavior and investment competence? Financial Markets and Portfolio Management, 30(3), 233–275.
Baddeley, Alan., Richard Allen, & Faraneh Vargha-Khadem. (2010) Is the hippocampus necessary for visual & verbal binding in working memory? Neuropsychologia.48(2010)1089–1095. www.elsevier.com/locate/neuropsy
Baghani, M. R., & Sedaghat, P. (2016). Effect of risk perception and risk tolerance on investors' decision making in Tehran stock exchange. International Academic Journal of Accounting & Financial Management, 3(9), 45-53.
Bajo, E., M. Barbi, S. Sandri, (2015) Financial Literacy, Households’ Investment Behavior, and Risk Propensity. Journal of Financial Management, Markets, and Institutions Vol 3. No. 1 P. 156-174 (Doi: 10.12831/80534) (ISSN 2282-717X)
Baihaqqy, M. R. I., Disman, D., Nugraha, N., Sari, M., & Ikhsan, S. (2020). The Effect of Financial Literacy on the Investment Decision. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(4), 3073–3083.
Baker, H. K., & Ricciardi, V. (2014). How biases affect investor behaviour. The European Financial Review, 7–10.
Baker, H. Kent, and John R. Nofsinger. (2010). Behavioral finance: investors, corporations, and markets, Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Baker, H.K. and Nofsinger, J.R. (2002), “Psychological biases of investors”, Financial Services Review, Vol. 11 No. 2, p. 97.
Barber, B. M., & Odean, T. (2008). All that glitters: the effect of attention and news on the buying behavior of individual and institutional investors. Review of Financial Studies, 21, 785–818.
Barber, B. M., & Odean, T. (2001). Boys will be boys: gender, overconfidence, and common stock investment. The Quarterly Journal of Economics, (February), Vol. 116 No. 1, 261–293.
Barber, B. M., & Odean, T. (2000). Trading is hazardous to your wealth: the common stock investment performance of individual investors. The Journal of Finance, Vol. 55 No. 2, pp. 773–806.
Barber, B.M. and Odean, T. (1999), “The courage of misguided convictions”, Financial Analysts Journal, Vol. 55 No. 6, pp. 41-55.
Barberis, N. and Thaler, R. (2003), “A survey of behavioral finance”, Handbook of the Economics of Finance, Vol. 1, pp. 1053-1128.
Becker, J.-M., Ringle, C.M., Sarstedt, M. and Völckner, F. (2015), “How collinearity affects mixture regression results”, Marketing Letters, Vol. 26 No. 4, pp. 643-659.
Benos, A. V. (1998). Aggressiveness and survival of overconfident traders. Journal of Financial Markets, 1(3–4), 353–383.
Bikas, Egidijus, Petras Dubinskas (2013) Behavioural Finance: The Emergence and Development Trends. World Conference on Psychology and Sociology 2012. Procedia - Social and Behavioral Sciences 82 (2013) 870 – 876 The Authors. Published by Elsevier Ltd. Open access.
Bikhchandani, Sushil dan Sunil Sharma. 2001. “Herd Behavior in Financial Markets”. IMF Staff Papers, Vol. 47, No. 3, h. 279-310.
Black, F dan Scholes, M. (1973). The Pricing of Options and Corporate Liabilities. The Journal of Political Economy
Blau, P. M. (1964). Exchange & power in social life. New York, NY: John Wiley & Sons.
Bloom, Benjamin S. (1956). Taxonomy of Educational Objectives: Handbook 1, Cognitive Domain. Classificationm of Educational Goals. London: David McKay Company, Inc.
Bonaparte, Y., Kumar, A., & Page, J. K. (2017). Political climate, optimism, and investment decisions. Journal of Financial Markets, 34, 69–94.
Broadbent, D. E. (1958). The selective nature of learning. In D. E. Broadbent, Perception, and communication (pp. 244–267). Pergamon Press. https://doi.org/10.1037/10037-010
Bruner, Jerome S. (1960). The Process of Education. ISBN 978-0-674-71001-6. Studies in Cognitive Growth. 1966. Processes of Cognitive Growth: Infancy.
Campbell, J. Y., Ramadorai, T., & Ranish, B. (2019). Do the rich get richer in the stock market? Evidence from India. The American Economic Review: Insights, 1(2), 225–240.
Campbell, J. P., McCloy, R. A., Oppler, S. H., & Sager, C. E. (1993). A theory of performance. In N. Schmmitt, W. C. Borman, & Associates (Eds), Personnel selection in organizations. San Francisco: Jossey-Bass.
Campbell, John P., Jeffrey J. Mchenry, Lauress L. Wise (1990) Modeling Job Performance in Population of Jobs. Journal Personnel Psychology. Volume 43. Pages 313-575. First published: June 1990 https://doi.org/10.1111/j.1744-6570.1990.tb01561.x
Campbell, J. P. (1990). Modeling the performance prediction problem in industrial and organizational psychology. In M. D. Dunnette, & L. M. Hough (Eds), Handbook of industrial and organizational psychology (2nd ed.). Palo Alto, CA: Consulting Psychology Press.
Chavas, Jean-Paul. (2004) Risk analysis in theory and practice. Publication date 2004/7/1. Publisher Elsevier. ISBN: 9780121706210; eBook ISBN: 9780080516332
Chen, Haiyang & Ronald P. Volpe. (1998). An analysis of personal financial literacy among college students. Financial Services Review. Vol 7, Issue 2, 1998, Pages 107-128. https://doi.org/10.1016/S1057-0810(99)80006-7
Chen, Peter M., Edward K. Lee, Garth A. Gibson, Randy H. Katz, David A. Patterson (1994) RAID: high-performance, reliable secondary storage. Authors Info & Claims ACM Computing Surveys Volume 26 Issue 2. pp 145–185. https://doi.org/10.1145/176979.17698 Published: 01 June 1994
Cheng, Y.-F., Mutuc, E. B., Tsai, F.-S., Lu, K.-H., & Lin, C.-H. (2018). Social capital and stock market participation via technologies: The role of households' risk attitude and cognitive ability. Sustainability, 10(6), 1904.
Chin, W. W. (1998). The partial least squares approach for structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Lawrence Erlbaum Associates Publishers.
Chung, C. Y., Lee, E., & Park, C.-G. (2020). Do ownership ties increase the optimistic bias of analysts' earnings estimates? Evidence from corporate financing in the Korean market. Sustainability, 12(11), 4657.
Chhapra, I. U., Kashif, M., Rehan, R., & Bai, A. (2018). An empirical investigation of investors behavioral biases on financial decision making. Asian Journal of Empirical Research, 8(3), 99–109.
Combrink, S., & Lew, C. (2020). Potential underdog bias, overconfidence, and risk propensity in investor decision-making behavior. The Journal of Behavioral Finance, 21(4), 337–351.
Concetto, C. L., & Ravazzolo, F. (2019). Optimism in financial markets: Stock market returns and investor sentiments. Journal of Risk and Financial Management, 12(2), 1–14.
Czaja, D., & Roder, F. (2020). Self-attribution bias and overconfidence among nonprofessional traders. The Quarterly Review of Economics and Finance, 78(4), 186–198. https://doi.org/10.1016/j.qref.2020.02.003
Czupryna, M., Kubinska, E., Markiewicz, Ł., & Tyszka, T. (2020). On the modified measure of illusion of control. Journal of Behavioral and Experimental Economics, 101648.
Dai, Z., & Zhu, H. (2020). Stock return predictability from a mixed model perspective. Pacific-Basin Finance Journal, 60, 101267.
Daniel, K., & Shleifer, D. (2015). Overconfident investors, predictable returns, and excessive trading. The Journal of Economic Perspectives, 29(4), 61–88.
Dang, Ha V., & Mi Lin (2016) Herd Mentality in the Stock Market: On the Role of Idiosyncratic Participants with Heterogeneous Information. DOI:10.2139/ssrn.2863657 Corpus ID: 55834666
Dawson, I. G. (2019). Taking responsibility: Self-attribution for risk creation and its influence on the motivation to engage in risk management behaviors. Journal of Risk Research, 1–12.
De Bondt, Werner, Gulnur Muradoglu, Hersh Shefrin, and Sotiris K. Staikouras. (2008). Behavioral Finance: Quo Vadis? Journal Of Applied Finance M Fall/Winter 2008. P. 1-19
Du Toit, Adeline & Marié-Luce Muller. (2004) Organizational structure of competitive intelligence activities: a South African case study. Peer Reviewed Article Vol.6(3) September 2004
Du Toit, A.S.A. (2003). Competitive intelligence in the knowledge economy: what is in it for South African manufacturing enterprises? International journal of information management, 23(1):111-120.
Emerson, Richard. 1972a. "Exchange Theory Part I: A Psychological Basis for Social Exchange." pp. 38-57 in Sociological Theories in Progress, edited by Joseph Berger, Morris Zelditch Jr., and B. Anderson. Boston: Houghton Mifflin.
Emerson, Richard. 1976. "Social Exchange Theory." Annual Review of Sociology 2:335-362.
Entrop, O., McKenzie, M., Wilkens, M., & Winkler, C. (2016). The performance of individual investors in structured financial products. Review of Quantitative Finance and Accounting, 46(3), 569–604.
Fellner, G. (2009). Illusion of control as a source of poor diversification: Experimental evidence. The Journal of Behavioral Finance, 10(1), 55–67.
Fornero, E., & Monticone, C. (2011). Financial literacy and pension plan participation in Italy. Journal of Pension Economics and Finance, 10(4), 547–564. https://doi.org/10.1017/S1474 747211000473
Flanagan, R. and Norman, G. (1993) Risk Management and Construction. Blackwell Scientific, Oxford.
Fornero, E., & Monticone, C. (2011). Financial Literacy and Pension Plan Participation in Italy. Journal of Pension Economics & Finance, 10, 547-564. https://doi.org/10.1017/S1474747211000473
Forbes, William (2009); Behavioural Finance; A John Wiley & Sons Inc. Ltd, Publication. United Kingdom.
Fromlet, H. (2001) Systematic analysis of departures from the homo economicus paradigm are essential for realistic financial research and analysis. Business Economics, 2001, 36(3).
Glaser, M. and Weber, M. (2007), “Overconfidence and trading volume”, The Geneva Risk and Insurance Review, Vol. 32 No. 1, pp. 1-36.
Ghozali, (2012) Model Persamaan Struktural: Konsep dan Aplikasi dengan Program Amos ver 5.0, Badan Penerbit Universitas Diponegoro, Semarang, 2005.
Goetzmann, W.N. and Kumar, A. (2008), “Equity portfolio diversification”, Review of Finance, Vol. 12 No. 3, pp. 433-463.
Grinblatt, M. and Keloharju, M. (2000), “The investment behavior and performance of various investor types: a study of Finland’s unique data set”, Journal of Financial Economics, Vol. 55 No. 1, pp. 43-67.
Grohmann, A. (2018). Financial literacy and financial behavior: Evidence from the emerging Asian middle class. Pacific-Basin Finance Journal, Volume 48, page 129-143.
Hackbarth, Dirk. 2009. Determinants of corporate borrowing: A behavioral perspective. Journal of Corporate Finance 15:4, 389–411.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (3 ed.). Thousand Oaks, CA: Sage.
Hair, J. F., Hollingsworth, C. L., Randolph, A. B., & Chong, A. Y. L. (2017a). An updated and expanded assessment of PLS-SEM in information systems research. Industrial Management & Data Systems, 117(3), 442–458.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017b). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks: Sage.
Hameed, Naila and Shahzad Khan (2021) Differentiation between Heuristic and Meticulous Domain of Financial Risk-Taking Propensity. Journal of Contemporary Business and Islamic Finance Volume 1, Issue 1, 2021 C.E./1443H, Pages 11-22 https://journals.iub.edu.pk/index.php/jcbif
Homans, G. C. (1961). Social behavior: Its elementary forms. Harcourt, Brace.
Hsu, Y.-L., Chen, H.-L., Huang, P.-K., & Lin, W.-Y. (2020). Does financial literacy mitigate gender differences in investment behavioral bias? Finance Research Letters, 101789.
Huston, S. J. (2010). Measuring financial literacy. Journal of consumer affairs, 44(2), 296-316.
Javed, H, Bagh T, Razzaq S (2017) Herding Effects, Over Confidence, Availability bias and Representativeness as Behavioral Determinants of Perceived Investment Performance: An Empirical Evidence from Pakistan Stock Exchange (PSX). J Glob Econ 6: 275. Volume 6 • Issue 1 • 1000275. ISSN: 2375-4389 http: //doi.org/10.4172/2375-4389.1000275
Javed, M. A., & Marghoob, S. (2017). The effects of behavioural factors in investment decision making at Pakistan stock exchanges. Journal of Advanced Research in Business and Management Studies, 7(1), 103–114.
Jensen, M. C. & Meckling, W. H., (1976), 'Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure', Journal of Financial Economics 3, 305-360.
Jurevičienė, Daiva, Egidijus Bikas, Eglė Gausienė., (2012) Behavioural Finance During Economic Downturn In Lithuania. 7th International Scientific Conference. “Business and Management 2012” May 10-11, 2012, Vilnius, Lithuania. ISSN 2029-4441 print / ISSN 2029-929X online. ISBN 978-609-457-116-9 CD. doi:10.3846/bm.2012.011 http://www.bm.vgtu.lt P. 75-83
Kanagasabai, B., & Aggarwal, V. (2020). The mediating role of risk tolerance in the relationship between financial literacy and investment performance. Colombo Business Journal. 11(1), 83-104.
Kahneman, D. and A. Tversky, (1979). “Prospect Theory: An Analysis of Decisions Under Risk,” Econometrica. Vol. 47 No. 2 (1979): 313–327.
Kahneman, D., Slovic, P., & Tversky, A. (1974). Judgment under uncertainty. Science, 185(4157), 1124–1131.
Kahneman, D., & Tversky, A. (1973). On the psychology of prediction. Psychological Review, 80, 237–251.
Kanfer, R. (1990). Motivation theory and industrial and organizational psychology. In M. D. Dunnette & L. M. Hough (Eds.), Handbook of industrial and organizational psychology (pp. 75–170). Consulting Psychologists Press.
Kanagasabai, B. and Aggarwal, V., 2020. The Mediating Role of Risk Tolerance in the Relationship between Financial Literacy and Investment Performance. Colombo Business Journal, 11(1), pp.83–104. DOI: http://doi.org/10.4038/cbj.v11i1.58
Kapoor, S., & Prosad, J. M. (2017). Behavioural finance: A review. Procedia Computer Science, 122, 50–54. Information Technology and Quantitative Management (ITQM2017). Available online at www.sciencedirect.com
Keller, C., & Siegrist, M. (2006). Investing in stocks: The influence of financial risk attitude and values-related money and stock market attitudes. Journal of Economic Psychology, 27(2), 285–303.
Kengatharan & Kengatharan. (2014). The Influence of Behavioral Factors in Making Investment Decisions and Performance: Study on Investors of Colombo Stock Exchange, Sri Lanka. Asian Journal of Finance & Accounting, 6(1), 1. https://doi.org/10.5296/ajfa.v6i1.4893
Kim, K. A., & Nofsinger, J. R. (2007). The behavior of Japanese individual investors during bull and bear markets. The Journal of Behavioral Finance, 8(3), 138–153.
Kumar, S., & Goyal, N. (2016). Evidence on rationality and behavioural biases in investment decision making. Qualitative Research in Financial Markets, 8(4), 270–287. https://doi.org/10.1108/QRFM-05-2016-0016
Kuncoro, A. E. dan Riduwan (2014). Cara Menggunakan dan Memakai Path Analysis (Analisis Jalur). Cetakan ke-6. Bandung: Alfabeta.
Kyle, A. S., & Wang, F. A. (1997). Speculation duopoly with agreement to disagree: Can overconfidence survive the market test? The Journal of Finance, 52(5), 2073–2090.
Lakonishok, Josef., Andrei Shleifer, Robert W. Vishny. (1992) The impact of institutional trading on stock prices. Journal of Financial Economics 31(1992) 13-43. North-Holland
Lee, P.T., Lin, H.W., Chang, Y.H., Fu, T.F., Dubnau, J., Hirsh, J., Lee, T., Chiang, A.S. (2011). Serotonin-mushroom body circuit modulating the formation of anesthesia-resistant memory in Drosophila. Proc. Natl. Acad. Sci. U.S.A. 108(33): 13794-13799.
Lintner, G. (1998) Behavioral Finance: Why Investors Make Bad Decisions. The Planner 13 (1): 7 – 8
Lintner, J. (1965) The Valuation of risky assets and the selection of risky investments in stock portfolios and Capital Budgets. The Review of Economics and Statistics. 1965, 47: 13-37
Liu, Y. H., Dai, S. R., Chang, F. M., Lin, Y. B., Lee, N. R. (2020) Does the investor sentiment affect the stock returns in taiwan's stock market under different market states? Journal of Applied Finance & Banking, 10(5), 41–59.
Loewenstein, G. F., Weber, E. U., Hsee, C. K., Welch, N. (2001). Risk as feelings. Psychological Bulletin,127(2),267–286. https://doi.org/10.1037/033
Loewenstein, George. (2001). The Creative Destruction of Decision Research Get access Arrow. Journal of Consumer Research, Volume 28, Issue 3, December 2001, Pages 499–505, https://doi.org/10.1086/323738
Luong, Le P., and Ha, D.T.T. (2011), “Behavioral factors influencing individual investors decision making and performance”, A survey at the Ho Chi Minh Stock Exchange.
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
Lusardi, Annamaria. (2012) "Numeracy, Financial Literacy, and Financial Decision-Making." Numeracy 5, Iss. 1 (2012): Article 2. DOI: http://dx.doi.org/10.5038/1936-4660.5.1.2
Lusardi, A., & Mitchell, O. S. (2011). Financial Literacy and Planning: Implications for Retirement Wellbeing. National Bureau of Economic Research, 17078.
Lusardi, A., Mitchell, O., & Mitchell, O. S. (2007). Financial Literacy and Retirement Planning: New Evidence from The Rand American Life Panel.
Maehr, M. L., & Braskamp, L. A. (1986). The motivation factor: A theory of personal investment. Lexington Books/D. C. Heath and Com.
Malouff, J. M., & Schutte, N. S. (2017). Can psychological interventions increase optimism? A meta-analysis. The Journal of Positive Psychology, 12(6), 594–604.
Marwan, M., & Sedeek, D. S. (2018). Managerial behavior and capital structure decisions; do overconfidence, optimism, and risk aversion matter? Asian Economic and Financial Review, 8(7), 925–945.
Markowitz, Harry (1952) “Portfolio Selection,” Journal of Finance 7, no. 1 (March 1952): PP. 77–91. 4
Mason, C.H. and Perreault, W.D. (1991), “Collinearity, power, and interpretation of multiple regression analysis”, Journal of Marketing Research, Vol. 28 No. 3, pp. 268-280.
Merton, R. C. (1969). Lifetime portfolio selection under uncertainty: the continuous time case. The Review of Economics &Statistics, 51(3), 247–25.
Modigliani M.F and Miller MH (1958) The cost of capital, corporate finance, and the theory of investment. American Economic Review49: 261–297.
Mouna, A. and Jarboui, A. (2015), "Financial literacy and portfolio diversification: an observation from the Tunisian stock market", International Journal of Bank Marketing, Vol. 33 No. 6, pp. 808-822. https://doi.org/10.1108/IJBM-03-2015-0032 Publisher: Emerald Group Publishing Limited
Mushinada, V. N. C., & Veluri, V. S. S. (2018). Investors overconfidence behaviour at Bombay stock exchange. International Journal of Managerial Finance, 14(5), 613–632. https://doi.org/10.1108/IJMF-05-2017-0093
Myers, Stewart C., (1977). "Determinants of corporate borrowing," Journal of Financial Economics, Published by Elsevier, Edition 1977 November. Volume 5. Issue 2, pages 147-175.
Natasya, Kusumastuti, D. H., Alifia, Farah, M.L. (2022), The Effect Between Behavioral Biases & Investment Decisions Moderated by Financial Literacy on the Millennial Generation. The Accounting Journal of BINANIAGA Vol. 07, No. 01, June 2022 p-ISSN: 2527-4309, e-ISSN: 2580-1481 5 th Accreditation Rating: January 14, 2019 - January 13,2024, p 113-126
Neisser, Ulric Richard Gustav (1967). Cognitive psychology. Englewood Cliffs: Prentice-Hall. ISBN 978-0131396678
Odean, T. (1999), “Do investors trade too much?”, American Economic Review, Vol. 89 No. 5, pp. 1279-1298.
Odean, T. (1998a), “Are investors reluctant to realize their losses?”, The Journal of Finance, Vol. 53 No. 5, pp. 1775-1798.
Odean, T. (1998b) Volume, volatility, price & profit when all traders are above average. The Journal of Finance, 53(6), 1887–1934. http://dx.doi.org/10.1111/0022-1082.00078
Olsen, Robert A. (1998); Behavioral Finance and Its Implications for Stock-Price Volatility; Financial Analyst Journal, Vol. 54, No. 2; pp. 10 - 18
Panos, G. A., & Wilson, J. O. S. (2020). Financial literacy & responsible finance in the FinTech era: capabilities and challenges. European Journal of Finance,26(4–5),297–301. https://doi.org/10.1080/1351847X.2020.1717569
Parmitasari, R. D. A., Hamzah, D., Alam, S., & Laba, A. R. (2018). Analysis of ethics and investor behavior and its impact on financial satisfaction of capital market investors. Scienctific Research Journal (SCIRJ), 4.
Paule-Vianez, J., Gomez-Martinez, R.,Prado-Roman, C. (2020b). Effect of Economic and Monetary Policy Uncertainty on stock markets. Evidence on return, volatility, and liquidity, Publicated in Economics Bulletin, Volume 40, Issue 2, page 1261-1271
Piaget, J. (1950). Introduction à epistemologies Génétique. Paris: Presses Universities de France.
Pikulina, E., Renneboog, L. & Tobler, P.N. (2017). Overconfidence & investment: an experimental approach. Journal of Corporate Finance, Volume 43, p.175-192.
Pompian, Michael M. (2012); Behavioral Finance and Investor Types: Managing Behavior to Make Better Investment Decisions; John Wiley & Sons.
Pompian, M. (2011) Behavioural Finance and Wealth Management: How to Build Optimal Portfolios That Account for Investor Biases (2nd ed.). New Jersey: Wiley Finance Publications. 2011.
Pompian, Michael M. (2006); Behavioral Finance & Wealth Management: How to Build Optimal Portofolios that Account Investor Biases; John Wiley & Sons.
Pompian, M.M. and Longo, J.M. (2004), “A new paradigm for practical application of behavioral finance: creating investment programs based on personality type and gender to produce better investment outcomes”, The Journal of Wealth Management, Vol. 7 No. 2, pp. 9-15.
Quddoos, M. U., Rafique, A., Kalim, U. & Sheikh, M. R. (2020). Impact of Behavioral Biases on Investment Performance in Pakistan: The Moderating Role of Financial Literacy. Journal of Accounting and Finance in Emerging Economies, 6(4), 1199-1205
Raut, R. K. (2020). Past behaviour, financial literacy, and investment decision-making process of individual investors. International Journal of Emerging Markets, 15(6), 1243–1263.
Ricciardi, V. (2008), “The psychology of risk: the behavioral finance perspective”, Handbook of finance.
Ricciardi V. and Simon, H, K. (2000). What is Behavior in Finance? Business, Education, and Technology Journal, Fall: 1 – 9
Ritter, J.R. (2003) Behavioral Finance. Pacific-Basin Finance Journal, 11, 429-437. https://doi.org/10.1016/S0927-538X(03)00048-9.
Roe, R. A. (1999). Work performance: A multiple regulation perspective. In C. L. Cooper & I. T. Robertson (Eds.), International review of industrial and organizational psychology 1999, Vol. 14, pp. 231–335). John Wiley & Sons Ltd.
Sahi, S. K. (2017). Psychological biases of individual investors and financial satisfaction. Journal of Consumer Behaviour, 16(6), 511–535.
Sahi, S. K., Arora, A. P., & Dhameja, N. (2013). An exploratory inquiry into the psychological biases in financial investment behavior. The Journal of Behavioral Finance, 14(2), 94–103.
Saivasan, R. and Madhavi Lokhande (2022) Influence of risk propensity, behavioural biases, and demographic factors on equity investors’ risk perception. https://www.emerald.com/insight/2615-9821.htm
Samuelson, W., and R. Zeckhauser, 1988 “Status Quo Bias in Decision Making,” Journal of Risk and Uncertainty 1 (1988): 7–59
Sarin, Asheetu Bhatia., & Chowdhury Jivan Kumar. (2018) Overconfidence & emotional bias in investment decision performance. Zenith International Journal of Multidisciplinary Research. Vol. 8, (11). P. 320-330. 2231-5780.
Sarin, Asheetu Bhatia., & J.K Chowdhury. (2017) An Understanding of Role of Heuristic on Investment Decisions. International Review of Business and Finance. ISSN 0976-5891 Volume 9, Number 1 (2017), pp. 57-61.
Sato, K., Miyazaki, K. and Mawaribuchi, J. (2011), “Simple portfolio strategies utilizing inflation factor in Japanese equity market”, Procedia Computer Science, Vol. 4, pp. 1716-1725.
Schwartz, H. (1998). Rationality Gone Awry? Decision Making Inconsistent With Economic and Financial Theory Westport – Connecticut, Greenwood Publishing Group
Schindler, Mark (2007) Rumors in Financial Markets: Insights into Behavioral Finance (2007-03-27) [Hardcover] Unknown Binding. Willey Finance.
Sekaran, U. & Bougie 2016. Research methods for business: A skill-building approach. New York: Wiley.
Sewell, M. (2001) Behavioural Finance. University of Cambridge. (Revised 2007, April).
Shah, S. Z. A., Ahmad, M., Mahmood, F. (2018). Heuristic biases in investment decision-making & perceived market efficiency. Qualitative Research in Financial Markets, 10(1), 85–110. https://doi.org/10.1108/QRFM-04-2017
Sharma, Shivangee & Bobby W. Lyall (2021) A Study on The Effect of Major Behavioral Biases of Male and Female Investors on Risk Propensity. Journal of Archaeology of Egypt/Egyptology 18(1), 4972-4989. ISSN 1567-214x
Sharpe, William (1964) “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk,” Journal of Finance 19, no. 3 (September 1964): 425–442.
Shefrin, H. and Statman, M. (2001), “Behavioral portfolio theory”, The Journal of Financial and Quantitative Analysis, Vol. 35 No. 2, pp. 127-151.
Shefrin, H. and Meir Statman, 2000 The Journal of Financial and Quantitative Analysis 35, no. 2 (June 2000): 127–151.
Shefrin H. (2000), Beyond greed and fear: understanding behavioural finance and the psychology of investing, Boston, MA, Harvard Business School Press (2000)
Shefrin, H. and Statman, M. (1994), “Behavioral capital asset pricing theory”, The Journal of Financial and Quantitative Analysis, Vol. 29 No. 3, pp. 323-349.
Shefrin, H. M., & Thaler, R. H. (1988). The behavioral life-cycle hypothesis. Economic Inquiry, 26(4), 609–643.
Shefrin, H. and Statman, M. (1985), “The disposition to sell winners too early and ride losers too long: theory and evidence”, The Journal of Finance, Vol. 40 No. 3, pp. 777-790
Sitkin, S.B., & Weingrat, L. R. 1995. “Determinants of Risk Decision making Behavior A test of the Medianting Role of Risk Perception and Propensity”. Academy of Management Journal, Vol. 38, No 6., pp 1537-1592.
Sitkin, S.B. and Pablo, A.L. (1992), “Reconceptualizing the determinants of risk behavior”, The Academy of Management Review, Vol. 17 No. 1, pp. 9-38.
Sonnentag, S., & Frese, M. (2005). Performance Concepts and Performance Theory. In book: Psychological Management of Individual Performance (pp.1-25). January 2005. DOI:10.1002/0470013419.ch1
Sonnentag, Sabine (2002) Psychological Management of Individual Performance. First published:2 March 2002. Print ISBN:9780471877264 |Online ISBN:9780470013410 |DOI:10.1002/0470013419. Copyright © 2002 John Wiley & Sons, Ltd
Statman, M. (2012). The Cultures of Risk Tolerance. SSRN Electronic Journal, July. https://doi.org/10.2139/ssrn.1647086
Statman, M. (1999). Behavioural Finance: Past Battles and Future Engagements. Financial Analysts Journal, 1999, 55(6), 18-27.
Stolovitch, Harold D., and Keeps, Erica J., 1992, Handbook of Human Performance Technology A Comprehensive Guide for Analysis and Solving Performance Problem in Organizations. San Francisco: Jersey-Bass Publisher
Sudradjat, M. Sw. (2002) Metode Penarikan Sampel dan Penyusunan Skala. Serial Pengenalan Dasar - Dasar Statistika Terapan No. 12. Program Pascasarjana Universitas Padjajaran. Bandung.
Tekce, B., Yılmaz, N., & Bildik, R. (2016). What factors affect behavioral biases? Evidence from Turkish individual stock investors. Research in International Business and Finance, 37, 515–526.
Thaler, R., (1980). “Towards a Positive Theory of Consumer Choice,” Journal of Economic Behavior and Organization 1 (1980): 39–60.
Trehan, M. B., & Sinha, A. K. (2017). An empirical study of impact of trading experience on self-attribution and optimism bias among investors leading to overconfidence. Emerging Issues in Finance, 1, 2017.
Trejos, C., van Deemen, A., Rodríguez, Y. E., & Gomez, J. M. (2019). Overconfidence and disposition effect in the stock market: A micro world based setting. Journal of Behavioral and Experimental Finance, 21, 61–69.
Ullah, S. (2015). An Empirical Study of Illusion Control & Self-Serving Attribution Bias, Impact on Investor’s Decision Making: Moderating Role of Financial Literacy. Research Journal of Finance & Accounting, 6(19), 109–118.
VanderPal, Geoffrey A. (2021) Emotional Quotient and Intelligence Quotient on Behavioral Finance and Investment Performance. Journal of Marketing Development and Competitiveness Vol. 15(2) P. 83-92
Van Rooij, M. C. J., Lusardi, A., & Alessie, R. J. M. (2011). Financial literacy and retirement planning in the Netherlands. Journal of Economic Psychology, 32(4), 593–608. https://doi.org/10.1016/j.joep.2011.02.004.
Waweru, N., Evelyne Munyoki, E. Uliana (2008) The effects of behavioural factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange. Business, Economics. International Journal of Business and Emerging Markets Published Online: July 7, 2008. pp 24-41 https://doi.org/10.1504/IJBEM.2008.019243
Weber, James L. (1990) Informativeness of human (dC-dA)n·(dG-dT)n polymorphisms. Author links open overlay panel. Elsevier. Journal Genomics. Volume 7, Issue 4, August 1990, Pages 524-530.
Zacharakis, A. L., & Shepherd, D. A. (2001). The nature of information and overconfidence on venture capitalists' decision making. Journal of Business Venturing, 16(4), 311–332
Zakamouline, V. and Koekebakker, S. (2009), “Portfolio performance evaluation with generalized Sharpe ratios: beyond the mean and variance”, Journal of Banking and Finance, Vol. 33 No. 7, pp. 1242-1254.
Zhang, Huanhuan and Xueping Xiong (2019) Is financial education an effective means to improve financial literacy? Evidence from rural China. Agricultural Finance Review Vol. 80 No. 3, 2020 pp. 305-320 © Emerald Publishing Limited 0002-1466. DOI 10.1108/AFR-03-2019-002
Yin, Robert K. (2014). Case Study Research Design and Methods (5th ed.). Thousand Oaks, CA: Sage. 282 pages. Journal: CJPE; Volume 30; Issue: 1 ISBN 978-1-4522-4256-9. DOI: 10.3138/CJPE.BR-240
Yousaf, I., S. Ali, and S. Z. A. Shah, (2018) Herding behavior in Ramadan and financial crises: the case of the Pakistani stock market. Financial Innovation 4:16 https://doi.org/10.1186/s40854-018-0098-9
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Terms:
- Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
