Behavioral biases and decisions of real and legal investors under conditions of uncertainty in Tehran Stock Exchange

Document Type : Original Article

Authors

1 PhD Student, Department of Accounting, Boroujerd Branch, Islamic Azad University, Boroujerd, Iran

2 Department of Accounting, Boroujerd Branch, Islamic Azad University, Boroujerd, Iran.

Abstract

In this study, the behavioral biases and decisions of real and legal investors under conditions of uncertainty in the Tehran Stock Exchange were investigated. For this purpose, two market conditions including uncertainty due to uptrend without resistance and uncertainty due to downtrend without support are studied as conditions of uncertainty in investment decisions and the effect of 15 behavioral biases of investors in two groups of investors. Real and legal were tested on financial decisions based on buying, selling or not taking action for the transaction. The statistical population of the study included real and legal investors in the Tehran Stock Exchange, of which 385 real investors and 100 legal investors were selected by available sampling method and research questionnaires were provided to them. In order to analyze the data obtained from the distribution of the questionnaire, the fitting of polynomial logistic regression models was used and the results showed that the behavioral biases of real and legal investors had different effects on their investment decisions and also the type of influence of each. Behavioral biases on a variety of investment decisions have varied due to market uncertainty. Finally, models were proposed to predict the investment decisions of both groups of real and legal investors using their behavioral biases.

Keywords

References

  • آقاجانی، وحدت؛ پاک مرام، عسگر؛ عبدی، زسول؛ نریمانی، محمد (1399). رابطه تیپ‌های رفتاری و تصمیمات سرمایه‌گذاری با میانجی گری خودکارآمدی، پژوهشهای نوین روانشناختی، 15 (60)، 130-115.
  • جهانی، امیرمسعود؛ شورورزی، محمدرضا؛ مسیح آبادی، ابوالقاسم؛ مهرآذین، علیرضا (1399). ارائه مدلی برای تبیین رفتارهای مالی سرمایه‏گذاران در فعالیت‌های زیست محیطی بر مبنای ادراک از بازده پورتفوی سهام و مکانیزم‌های روانشناختی در بورس اوراق بهادارتهران، تحقیقات اقتصاد کشاورزی، 14(1)، 18-1.
  • حساس یگانه، یحیی؛ ابراهیمی سروعلیا، محمدحسن؛ قاضی نوری، سروش؛ افخمی، عادل (1398). فرشتگان سرمایه گذار: ارزیابی عوامل مالی رفتاری موثر بر گزینش سرمایه گذاری. دانش مالی تحلیل اوراق بهادار (مطالعات مالی)، 12(43)، 41-58.
  • راکی، مولود؛ مهرآرا، محسن؛ عباس نژاد، حسین؛ سوری، علی (1399). مدلسازی اثر تورش رفتاری زیان گریزی بر پویایی‌های قیمت و بازدهی بازار سهام (کاربرد مدل سازی مبتنی بر عامل در اقتصاد رفتاری)، دانش مالی تحلیل اوراق بهادار، 13(45)، 165-180.
  • صادقی، ابراهیم؛ باغبان، مهدی (1399). بررسی تاثیر تورش‌های رفتاری سرمایه‌گذاران بر تصمیم‌گیری مالی (مورد مطالعه: سرمایه‌گذاران بانک گردشگری تهران)، پژوهشکده مطالعات توسعه جهاددانشگاهی و موسعه آموزش عالی آزاد نگاره، دوره 1، 12-1.
  • قلعه دره، سمیره؛ خلیلی، کرم؛ یاسینی، علی؛ اسماعیلی ‌کیا، غریبه (1399). شناسایی عوامل مؤثر بر شکل گیری رفتار توده وار سرمایه‌گذاران بورس اوراق بهادار تهران، مدیریت توسعه و تحول، 42، 56-47.
  • کاکائی، حمید؛ محمدیان، آزاده؛ عباسی، پروین؛ مومنی، مجید (1400). بررسی ارتباط عوامل فردی با رفتارهای مالی سرمایه گذاران بورس اوراق بهادار ایران. فصلنامه علمی تخصصی رویکردهای پژوهشی نوین در مدیریت و حسابداری، 5(54)، 126-135.
  • Aburayya, A., Alshurideh, M., Albqaeen, A., Alawadhi, D., Al A’yadeh, I. (2020). An investigation of factors affecting patients waiting time in primary health care centers: an assessment study in Dubai. Manag. Sci. Lett. 10(6), 1265–1276.
  • Aigbovo, O., and Ilaboya, O. J. (2019). Does Behavioural Biases Influences Individual Investment Decisions, Vol. 10. Benin City: University of Benin, 68–89.
  • Al Kurdi, B. (2017). Investigating the factors influencing parent toy purchase decisions: reasoning and consequences. Int. Bus. Res. 10(4), 104–116.
  • Alnajjar, M. I. M. (2013). Behavioural inferences of stock market participants. Eur. J. Soc. Sci. 39, 384–390.
  • Alzoubi, H., Alshurideh, M., Al Kurdi, B., Inairata, M. (2020). Do perceived service value, quality, price fairness and service recovery shape customer satisfaction and delight? A practical study in the service telecommunication context. Uncertain Supply Chain Manag. 8(3), 1–10.
  • Armansyah, R. F. (2018). Herd behavior and indonesian financial crisis. J. Adv. Manag. Sci. 6, 86–89. doi: 10.18178/joams.6.2.86-89
  • Babajide, A. A., and Adetiloye, K. A. (2012). Investors ’ behavioural biases and the security market?: an empirical study of the nigerian security market. Account. Finance Res. 1, 219–229.
  • Baker, H.K., Kumar, S., Goyal, N. and Gaur, V. (2019), "How financial literacy and demographic variables relate to behavioral biases", Managerial Finance, Vol. 45 No. 1, pp. 124-146.
  • Barberis, N. (2017). Behavioural Finance: Asset Prices and Investor Behavior. New Haven, CT: Yale University.
  • Bashir, T., Rasheed, S., Raftar, S., Fatima, S., & Maqsood, S. (2013). Impact of behavioral biases on investor decision making: Male vs female.Journal of Business and Management,10(3), 60-68.
  • Chaffai, M., and Medhioub, I. (2018). Herding behaviour in Islamic GCC stock market?: a daily analysis. Int. J. Islamic Middle Eastern Finance Manag. 11, 182–193.
  • Cueva, C., and Rustichini, A. (2015). Is financial instability male-driven? Gender and cognitive skills in experimental asset markets ?. J. Econ. Behav. Organ. 119, 330–344.
  • García-Feijoo, M., Eizaguirre, A., Rica-Aspiunza, A. (2020). Systematic review of sustainabledevelopment-goal deployment in business schools. Sustainability 12(1), 440.
  • Gerardi, K., Goette, L., and Meier, S. (2013). Numerical ability predicts mortgage default. Proc. Nal. Acad. Sci. U.S.A. 110, 11267–11271.
  • Ghannajeh, A., et al. (2015). A qualitative analysis of product innovation in Jordan’s pharmaceutical sector. Eur. Sci. J. 11(4), 474–503.
  • Handoyo, S. D., Rispantyo, and Widarno, B. (2020). Pengaruh overconfidence, illusion of control, anchoring, loss aversion pada pengambilian keputusan investasi oleh mahasiswa unisri sebagai investor pemula. J. Akuntansi Sist. Teknol. Inf. 15, 411–421.
  • Ifcher, J., Zarghamee, H.(2019). Behavioral economic phenomena in decision-making for others. J. Econ. Psychol. 77, 102180
  • Indārs E. R., Savin A., Lublóy A., (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange, Emerging Markets Review, Vol. 38, 468-487.
  • Kannadas S. (2021). Investment behavior of short-term versus long-term individual investors of PAN India – An empirical study. Investment Management and Financial Innovations, 18(2), 223-233
  • Khan, & Khalil, Yasir & Khan, Abdul. (2017). Impact of Behavior Biases on Perceived Trading Return. 03. 63.
  • Klapper, L., Lusardi, A., and Panos, G. A. (2013). Financial literacy and its consequences?: evidence from Russia during the financial crisis. J. Bank. Finance 37, 3904–3923.
  • Lusardi, A., Mitchell, O. S., Lusardi, A., and Mitchell, O. S. (2014). the economic importance of financial literacy: theory and evidence. J. Econo. Lit. 52, 5–44.
  • Metilda, M. (2015). Role of illusion of control bias in herding behaviour. Adarsh J. Manag. Res. 8, 1–8.
  • Mushinada, V. N. C. (2020). Journal of behavioral and experimental finance are individual investors irrational or adaptive to market dynamics? J. Behav. Exp. Finance 25:100243.
  • Ngacha S. W., (2019). Influence of Behavioral Biases Influencing Individual Investments Decisions by University Students’: A Case of United States International University-Africa, Master thesis, United States International University-Africa.
  • Nkukpornu E., Gyimah P., Sakyiwaa L.,( 2020). Behavioural Finance and Investment Decisions: Does Behavioral Bias Matter?, International Business Research, Canadian Center of Science and Education, 13(11), 1-65.
  • Pompian, M. M. (2012). Behavioural Finance and Investor Types: Managing Behavior toMake Better Investment Decisions. Hoboken, NJ: JohnWiley & Sons.
  • Rahman, M., Gan, S.S. (2020). Generation Y investment decision: an analysis using behavioural factors. Manag. Financ.
  • Ross, S. A., Westerfield, R. W., Jaffe, J. F., and Jordan, B. D. (2016). Corporate Finance, 11th Edn. Toronto, ONT: Mcgraw Hill.
  • Sabir, S. A., Mohammad, H. B., and Shahar, H. B. K. (2018). The effect of illusion of control and self attribution on herding behaviour with a moderating role of information availability: a case of retail investors of pakistan stock exchange. Opción 34, 2675–2689.
  • Setyowati, A., Harmadi, H., and Sunarjanto, S. (2018). Islamic financial literacy and personal financial planning?: a socio-demographic study. Int. J. Econ.Manag. 5, 149–168.
  • Shah, S.Z.A., & Ahmad, M.(2019). Entrepreneurial orientation and performance of small and medium-sized enterprises.Competitiveness Review: An International Business Journal, 29(5), 551-572.
  • Sharma, A., and Kumar, A. (2019). A review paper on behavioural finance: study of emerging trends. Q. Res. Financial Mark. . 12, 137–157.
  • Shefrin, H., and Statman, M. (2011). “Behavioural finance in the financial crisis: market efficiency, minsky, and keynes,” in Rethinking the Financial Crisis, Working Paper, Santa Clara, CA: Santa Clara University.
  • Shukla A., Jamal Rushdi N., Chandra Katiyar R., (2020). Impact of Behavioral Biases on Investment Decisions ‘A Systematic Review’, International Journal of Management, 11 (4), 68-76.
  • Tiniç, M., Iqbal, M. S., and Mahmud, S. F. (2020). Information cascades, shortselling constraints, and herding in equity markets. Borsa Istanbul Rev. 20, 347–357.
  • Tversky, A.,& Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model.The Quarterly Journal of Economics,106(4), 1039-1061.
  • Widityani, S. F., Faturohman, T., and Rahadi, R. A. (2020). Do socio-demographic characteristics and financial literacy matter for selecting islamic financial products. J. Islamic Monetary Econ. Finance 6, 51–76.

Files

Share

How to cite

Statistics