7th International Science Congress (ISC-2017).  International E-publication: Publish Projects, Dissertation, Theses, Books, Souvenir, Conference Proceeding with ISBN.  International E-Bulletin: Information/News regarding: Academics and Research

Review on behavioural factors affecting investment decisions

Author Affiliations

  • 1Bhilai Institute of Technology, Durg, CG, India
  • 2Bhilai Institute of Technology, Durg, CG, India

Res. J. Management Sci., Volume 6, Issue (5), Pages 50-53, May,6 (2017)

Abstract

This paper provides background to explore the key objectives of behavioural finance and its determinants which attempt to explain the biases and inefficiencies present in the financial market. The purpose of this paper is to identify some future research issues of the determinants of behavioural finance in correlation to investment strategies and management. The research is based on searching keywords in database in Google Scholar, Elsevier and Emerald on the basis of number of publications and times cited for the respective factor to measure the contributions of active researchers. Considering behavioural finance as emerging area of research in relation with investment strategies many researchers are contributing, making it a significant field of study considering specific determinant. This paper highlights with limited number of literature survey that there is considerable impact of determinants on decision making and need to be studied in depth. Most of the model formulated for analysis purpose in the literatures so far reviewed has some limitations to justify every behavioural factor and variables. Research related to factors which have association with varying time like time varying aggregate risk and variation in return is to be analysed. Finally, this paper will draw unique conclusions across behavioural finance and hypothesise about which determinants within the scope of behavioural finance are likely to yield most influencing research in the near future.

References

  1. Vieira E.F. and Pereira M.S. (2015)., Herding behaviour and sentiment: Evidence in a small European market., Revista de Contabilidad – Spanish Accounting Review, 18 (1), 78-86.
  2. Markowitz H. (1952)., Portfolio Selection., The Journal of Finance, 7(1), 77-91.
  3. Merton R.C. (1969)., Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case., The Review of Economics and Statistics, 51(3), 247-257.
  4. Fama E.F. (1970)., Efficient Capital Markets: A Review of Theory and Empirical Work., The Journal of Finance, 25(2), 383-417.
  5. Huang Jim Yuh, Shieh J.C. and Kao Y.C. (2015)., Starting points for a new researcher in behavioural finance., International Journal of Managerial Finance, 12 (1), 92-103.
  6. Shaikh I. and Padhi P. (2015)., The implied volatility index: Is ‘investor fear gauge’ or ‘forward-looking’., Borsa Istanbul Review, 15(1), 44-52.
  7. Henker J., Henker T. and Mitsios A. (2006)., Doinvestors herd intraday in Australian equities?., International Journal of Managerial Finance, 2(3), 196-219.
  8. Doker A.C., Turkmen A. and Emsen O. (2016)., What Are the Demographic Determinants of Savings? An Analysis on Transition Economies (1993-2013)., Procedia Economics and Finance, 39(2), 275-283.
  9. Lahno A.M., Garcia M.S., D’Exelle B. and Verschoor A. (2015)., Conflicting risk attitudes., Journal of Economic Behavior & Organization, 118(1), 136-149.
  10. Aren S. and Dinç Aydemir S. (2015)., The factors influencing given investment choices of individuals., Social and Behavioral Sciences, 210(2), 126-135.
  11. Snieska V. and Zykiene I. (2015)., City attractiveness for investment: characteristics and underlying Factors., Procedia - Social and Behavioral Sciences, 213(2), 48-54.
  12. Spuchľakova E., Frajtova Michalikovab K. and Misankova M. (2015)., Risk of the Collective Investment and Investment Portfolio., Procedia Economics and Finance, 26(1), 167-173.
  13. Poveda A.C. (2013)., The relationship between development, investments,insecurity and social conditions in Colombia: a dynamic approach., Qual Quant, 47(2), 2769-2783.
  14. Simonsen Ahlgren P., Jensen M., Donangelo R. and Sneppen K. (2007)., Fear and its implications for stock markets., The European Physical Journal, 57(4), 153-158.
  15. Mei F.B. (2009)., Attitudes and behaviour in everyday finance: evidence from Switzerland., International Journal of Bank Marketing, 27(2), 108-128.
  16. Jagannathan R.K. (1998)., Relationship between Labor Income Risk and Average Return: Empirical Evidence from the Japanese Stock Market., The Journal of Business, 71(3), 319-347.
  17. Filip A., Pochea M. and Pece A. (2015)., The herding behaviour of investors in the CEE stocks markets., Procedia Economics and Finance, 32(2), 307-315.
  18. Shih T.L., Hsu A.C., Yang S.J. and Lee C.C. (2012)., Empirical research of herding behavior in the Pacific Basin stock markets: Evidence from the U.S. stock market rise (drop) in succession., Social and Behavioral Sciences, 40(2), 7-15.
  19. Ogawa A., Onozaki T., Mizuno T., Asamizuya T., Ueno K., Cheng K. and Iriki A. (2014)., Neural Basis Of Economic Bubble Behavior., Neuroscience, 265(1), 37-47.
  20. Fauzi R. and Wahyudi I. (2016)., The effect of firm and stock characteristics on stock returns: Stock market crash analysis., The Journal of Finance and Data Science, 2(2), 112-124.
  21. Darren D. (2015)., Behavioral finance: insights from experiments I: theory and financial markets., Review of Behavioral Finance, 7(1), 78-96.
  22. Dhar V., Chou D. and Provost F. (2000)., Discovering Interesting Patterns for Investment Decision Making with GLOWER —A Genetic Learner Overlaid with Entropy Reduction., Data Mining and Knowledge Discovery, 4(4), 251-280.
  23. KAZMIER L.J. (1968)., Probability learning as related to the response format used., Psychon. Science, 11(6), 199-200.
  24. Littlejohn A., Milligan C., Fontana R.P. and Margaryan A. (2016)., Professional Learning Through Everyday Work:How Finance Professionals Self-Regulate Their Learning., Vocations and Learning, 9(2), 207-226.
  25. Ehrlinger J., Mitchum A.L. and Dweck C.S. (2016)., Understanding overconfidence: Theories of intelligence, preferential attention, and distorted self-assessment., Journal of Experimental Social Psychology, 63(2), 94-100.
  26. Mishra K. and Metilda M.J. (2015)., A study on the impact of investment experience, gender, and level of education on overconfidence and self-attribution bias., IIMB Management Review, 27(4), 228-239.
  27. Jing G., Hao C. and Xian Z. (2013)., Influence of Psychological and Emotional Factors on the Venture Enterprise Value and the Investment Decision-Making., Information Technology and Quantitative Management, 17(1), 919-929.
  28. Boussaidi R. (2013)., Overconfidence Bias and Overreaction to Private Information Signals: The case of Tunisia., Social and Behavioral Sciences, 81(2), 241-245.
  29. Frydman C. and Camerer C.F. (2016)., The Psychology and Neuroscience of Financial Decision Making., Trends in Cognitive Sciences, 20(9), 661-675.
  30. Ţiţan A.G. (2015)., Do Confidence Indexes Consider The Available Macroeconomic Information on Short Term?., Economics and Finance, 23(1), 501-506.
  31. Virlics A. (2013)., Investment Decision Making and Risk., Economics and Finance, 6, 169-177.
  32. Yin S., Mazouz K., Benamraoui A. and Saadouni B. (2017)., Stock price reaction to profit warnings: the role of time-varying betas., Rev Quant Finan Acc., 1-27.
  33. Caporale G. M., Alana L.G. and Plastun A. (2014)., Short-Term Price Overreactions: Identification, Testing,Exploitation., Computational Economics.
  34. Aren S. and Zengin A.N. (2016)., Influence of Financial Literacy and Risk Perception on Choice of Investment., Social and Behavioral Sciences, 235, 656-663.
  35. Nikolaev B. and Bennett D.L. (2016)., Give me liberty and give me control: Economic freedom, control perceptions and the paradox of choice., European Journal of Political Economy, 45(2), 39-52.
  36. Geetha S. and Vimala K. (2014)., Perception of Household Individual Investors towards Selected Financial Investment Avenues (With Reference to Investors in Chennai city)., Economics and Finance, 11(2), 360-374.