Theoretical and Applied Economics
No. 6 / 2014 (595)
Interrelationship of biases: effect investment decisions ultimately
University Institute of Management Sciences PMAS AAU, Rawalpindi, Pakistan
Abstract. The purpose of this study is to examine if investors of Islamabad Stock Exchange are indicating tendencies of irrational behavior when exposed to certain psychological dilemmas related to the financial world and what are interrelationships among these dilemmas, This study deals with three dilemmas i.e. self-attribution bias, overconfidence bias and overoptimism bias. The main purpose of the study is to empirically prove the relationship among the biases and their effect on the rational decision making of an investor. For this study quantitative method is used and a survey is conducted. For measuring the behavioral impact on decision making, Structural Equation Modeling is used on the collected empirical data to obtain the results. The findings of this study can be useful for individual investors, financial brokers, financial manager and other financial decision makers to improve their cognitive thinking process and make more rational decisions.
Contents
Assessing fiscal sustainability in some selected countries
Some insights about determinants of economic growth in Romania. An empirical exercise
Evolution of comovement between commodity futures: does biofuels matter?
Romanian banking activity spatial distribution between 2009 and 2012
The impact of the current financial and economic crisis on the European labor market – an approach based on a new paradigm in the labor field
Perspectives on FDI in the context of economic crisis
Interrelationship of biases: effect investment decisions ultimately
Opinions on the government assets evaluation