Abraham, G., Hall, J. H. a., & Cloete, C. E. (2014). Anchoring and adjustment and herding behaviour as heuristic-driven bias in property investment decision-making in South Africa. European Real Estate Society (ERES). 217.
Ajmal, S., Mufti, M. a., & Shah, Z. A. (2011). Impact of illusion of control on perceived efficiency in pakistani financialmarkets. Abasyn Journal of Social Sciences, 5(2), 100-110.
Ali Shah, S. Z., Ahmad, M., & Mahmood, F. (2017). Heuristic biases in investment decision-making and perceived market efficiency A survey at the Pakistan stock exchange. Qualitative Research in Financial Markets, 10(1), 85-110.
Bakar, S. a., & Yi, A. N. C. (2016). The impact of psychological factors on investors’ decision making in malaysian stock market: a case of Klang Valley and Pahang. Procedia Economics and Finance, 35, 319-328.
Baker, H. K. a., & Nofsinger, J. R. (2002). Psychological biases of investors. Financial Services Review, 11(2), 97-116.
Baker, H. K. a., & Nofsinger, J. R. (2010). Behavioral finance: an overview”, Behavioral Finance: Investors. Corporations, and Markets, 1-21.
Barber, B. M. a. O., T. (2002). Does Online Trading Change Investor Behavior? European Business Organization Law Review, 3(1), 83-128.
Barber, B. M. a. O., T. (2011). The behavior of individual investors. available at SSRN 1872211.
Barberis, N. a., & Thaler, R. (2003). A survey of behavioral finance. Journal of Finance, 50(2), 549-572.
Bazerman, M. H. (1998). Judgment inManagerial DecisionMaking (Vol. 4th ed). New York, NY.: Wiley.
Bazerman, M. H., Giuliano, T. a., & Appelman, A. (1984). Escalation of commitment in individual and group decision making. Organizational Behavior and Human Performance, 33(2), 141-152.
Ben-David, I. a., & Doukas, J. (2006). Overconfidence, trading volume, and the disposition effect: evidence from the trades of institutional investors. Working Paper. University of Chicago and Old Dominion University.
Bondt, W. F. M. D., & Thaler, W. (1985). Does the stock market overreact. The Journal of Finance, 11(3).
Brabazon, T. (2000). Behavioral Finance: A new sunrise or a false dawn? : University of Limerick.
Brahmana, R., Hooy, C. W., & Ahmad, Z. (2012). The role of herd behaviour in determining the investor’s Monday irrationality. ASIAN Academy of Management Journal of Accounting and Finance, 8(2), 1-20.
Chen G., Kim K., Nofsinger J.R., a., & M, R. O. (2007). Trading performance, disposition effect, overconfidence, representative bias and experience of emerging market investors.
Clark, S. (2014). The availability bias: how the news can hurt your investment decisions. An Excerpt from Perspectives, 3(1).
DeBondt, W. F. M. a., & Thaler, R. H. (1995). Financial decision making in markets and firms: a behavioral perspective. HandbooksinOperationsResearch and Management Science, 9(13), 385-410.
Fama, E. F. (1965). Random Walks in Stock Market Prices. Financial Analysts Journal, 21(5), 55-59.
Fama, E. F. (1998). Market efficiency, long-term returns, and behavioral finance. Journal of Financial Economics, 49(3), 283-306.
Ikram, Z. (2016). An empirical investigation on behavioral determinantson, impact on investment decision making, moderating role of locus of control. Journal of Poverty, Investment and Development, 26.
Irshad, S., Badshah, W. a., & Hakam, U. (2016). Effect of representativeness bias on investment decision making. Management and Administrative Sciences Review, 5(1), 26-30.
Ishfaq, M. a., & Anjum, N. (2015). Effect of anchoring bias on risky investment decision: evidence from Pakistan equitymarket. Journal of Poverty, Investment and Development, 14, 1-9.
Johnsson, Lindblom, & Platan. (2002). Beahvioural Finance- and the Change of Investor Behaviour During and After the Speculative Bubble at the End of the 1990s. (Master), Lund University. .
Kahneman, D. a., & Tversky, A. (1974). Judgment under uncertainty: heuristics and biases. Journal of Science,, 85(41), 1124-1131.
Khan, M. Z. U. (2015). Impact of availability bias and loss aversion bias on investment decision making, moderating role of risk perception. Journal of Research in Business Management, 1(2).
Lakonishok, J., Shleifer, A., & Vishny, R. W. (1994). Contrarian investment, extrapolation and risk. Journal of Finance,, 49(5), 1541-1578.
Lowies, G. A., Hall, J. H. a., & Cloete, C. E. (2016). Heuristic-driven bias in property investment decision-making in South Africa. Journal of Property Investment & Finance, 34(1), 51-67.
Merton, R. C. (1987). A simple model of Capital market equilibrium with incomplete information. The Journal of Finance, 42(3), 483-510.
Mittal, S. K. (2019). Behavior biases and investment decision: theoretical and research framework. Qualitative Research in Financial Markets, 14(2), 213-228. doi: 10.1108/QRFM-09-2017-0085
Montier, J. (2002). Behavioural Finance: Insight into Irrational Minds and Markets: Wiley.
Moore, D. A., & Healy, P. J. (2008). The trouble with overconfidence. Psychological Review, 115(2), 502.
Ngoc, L. T. B. (2014). Behavior pattern of individual investors in stock market. International Journal of Business and Management, 9(1), 1.
Nofsinger, J. R. (2001). The impact of public information on investors. Journal of Banking & Finance, 25(7), 1339-1366.
Odean, S. G. T. (2001). Learning to Be Overconfident. The Review of Financial Studies, 14(1), 1-27.
Odean, T. (1998). Are investors reluctant to realize their losses? Journal of Finance, 53(5), 1775-1798.
Odean, T. (2002). Volume, volatility, price and profit when all traders are above average. The Journal of Finance.
Parikh, P. (2011). Value Investing and Behavioral Finance. New Delhi Mcgraw Hill
Parveen, S., Satti, Z. W., & Bashir, T. (2021). Examining investors’ sentiments, behavioral biases and investment decisions during COVID-19 in the emerging stock market: a case of Pakistan stock market. Journal of Economic and Administrative Sciences.
Pompain, M. M. (2006). Behavioral Finance and Wealth Management (How to Build Optimal Portfolio That Account for Investor Biases), 1st ed. New Jersey, Canada.: JohnWiley&Sons.
Pompian, M. (2006). Behavioral Finance and Wealth Management: How to Build Optimal Portfolios that Account for Investor Biases. Hoboken: Wiley.
Ritter, J. R. (2003). Behavioral finance. Journal of Pacific-Basin Finance, 11(4), 429-437.
Salamouris, I. S., & Gulnur Muradoglu, Y. (2010). Estimating analyst’s forecast accuracy using behavioural measures (herding) in the United Kingdom. Managerial Finance, 36(3), 234-256.
Seppälä, A. (2009). Behavioral biases of investment advisors – the effect of overconfidence and hindsight bias. Doctoral dissertation.
Sharma, D. J., & Sarma, N. N. (2022). Behavioural Finance –A study on its Bases and Paradigms. International Journal of Scientific Research and Management (IJSRM), 10(3), 3517-3170.
Sharpe, W. F. (1964). Capital asset prices: a theory of market equilibrium under conditions of risk. The Journal of Finance, 19(3), 425-442.
Shefrin, H. (2000). Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing. Boston,MA.: Harvard Business School Press.
Shefrin, H. (2005). A Behavioral Approach to Asset Pricing. Burlington,MA: Elsevier.
Shefrin, H. (2007). Behavioral Corporate Finance: Decisions That Create Value. New York, NY.: McGraw Hill/Irwin.
Shefrin, H. (2008). Behavioral Approach Asset Pricing (Vol. 2nd ed). London: Elsevier.
Shefrin, H. S. M. (1985). The disposition to sell winners too early and ride losers too long: Theory and Evidence. Journal of Finance, 40, 777-791.
Shiller, R. J. (2000). Irrational Exuberance: Princeton University Press.
Slovic, P. a. L., S. . (1971). Comparison of Bayesian and regression approaches to the study of information processing in judgment. Organizational Behavior and Human Performance, 6(6), 649-744.
Statman, M., Thorley, S. a., & Vorkink, K. (2006). Investor overconfidence and trading volume. Review of Financial Studies, 19(4), 1531-1565.
Toma, F. M. (2015). Behavioral biases of the investment decisions of Romanian Investorson the Bucharest Stock Exchange. Procedia Economics and Finance, 32, 200-207.
Trinugroho, I. a., & Sembel, R. (2011). Overconfidence and excessive trading behavior: an experimental study. International Journal of Business andManagement, 6(7).
Tversky, A. a. K., D. . (1981). The framing of decisions and the psychology of choice. Science New York, N.Y, 211(4481), 453-458.
Waweru, N. M., Munyoki, E. a., & Uliana, E. (2008). The effects of behavioral factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange. International Journal of Business and Emerging Markets,, 1(1), 24-41.
Wermers, R. (1999). Mutual Fund Herding and the Impact on Stock Prices. Journal of Finance, 54(2), 581-622.
Yaowen, X. U. E., Suqing, S. U. N., Zhang, P., & Tian, M. E. N. G. (2015). Impact of cognitive bias on improvised decision-makers’ risk behavior: an analysis based on the mediating effect of expected revenue and risk perception. Management Science and Engineering, 9(2), 31-42.
Ajmal, S., Mufti, M. a., & Shah, Z. A. (2011). Impact of illusion of control on perceived efficiency in pakistani financialmarkets. Abasyn Journal of Social Sciences, 5(2), 100-110.
Ali Shah, S. Z., Ahmad, M., & Mahmood, F. (2017). Heuristic biases in investment decision-making and perceived market efficiency A survey at the Pakistan stock exchange. Qualitative Research in Financial Markets, 10(1), 85-110.
Bakar, S. a., & Yi, A. N. C. (2016). The impact of psychological factors on investors’ decision making in malaysian stock market: a case of Klang Valley and Pahang. Procedia Economics and Finance, 35, 319-328.
Baker, H. K. a., & Nofsinger, J. R. (2002). Psychological biases of investors. Financial Services Review, 11(2), 97-116.
Baker, H. K. a., & Nofsinger, J. R. (2010). Behavioral finance: an overview”, Behavioral Finance: Investors. Corporations, and Markets, 1-21.
Barber, B. M. a. O., T. (2002). Does Online Trading Change Investor Behavior? European Business Organization Law Review, 3(1), 83-128.
Barber, B. M. a. O., T. (2011). The behavior of individual investors. available at SSRN 1872211.
Barberis, N. a., & Thaler, R. (2003). A survey of behavioral finance. Journal of Finance, 50(2), 549-572.
Bazerman, M. H. (1998). Judgment inManagerial DecisionMaking (Vol. 4th ed). New York, NY.: Wiley.
Bazerman, M. H., Giuliano, T. a., & Appelman, A. (1984). Escalation of commitment in individual and group decision making. Organizational Behavior and Human Performance, 33(2), 141-152.
Ben-David, I. a., & Doukas, J. (2006). Overconfidence, trading volume, and the disposition effect: evidence from the trades of institutional investors. Working Paper. University of Chicago and Old Dominion University.
Bondt, W. F. M. D., & Thaler, W. (1985). Does the stock market overreact. The Journal of Finance, 11(3).
Brabazon, T. (2000). Behavioral Finance: A new sunrise or a false dawn? : University of Limerick.
Brahmana, R., Hooy, C. W., & Ahmad, Z. (2012). The role of herd behaviour in determining the investor’s Monday irrationality. ASIAN Academy of Management Journal of Accounting and Finance, 8(2), 1-20.
Chen G., Kim K., Nofsinger J.R., a., & M, R. O. (2007). Trading performance, disposition effect, overconfidence, representative bias and experience of emerging market investors.
Clark, S. (2014). The availability bias: how the news can hurt your investment decisions. An Excerpt from Perspectives, 3(1).
DeBondt, W. F. M. a., & Thaler, R. H. (1995). Financial decision making in markets and firms: a behavioral perspective. HandbooksinOperationsResearch and Management Science, 9(13), 385-410.
Fama, E. F. (1965). Random Walks in Stock Market Prices. Financial Analysts Journal, 21(5), 55-59.
Fama, E. F. (1998). Market efficiency, long-term returns, and behavioral finance. Journal of Financial Economics, 49(3), 283-306.
Ikram, Z. (2016). An empirical investigation on behavioral determinantson, impact on investment decision making, moderating role of locus of control. Journal of Poverty, Investment and Development, 26.
Irshad, S., Badshah, W. a., & Hakam, U. (2016). Effect of representativeness bias on investment decision making. Management and Administrative Sciences Review, 5(1), 26-30.
Ishfaq, M. a., & Anjum, N. (2015). Effect of anchoring bias on risky investment decision: evidence from Pakistan equitymarket. Journal of Poverty, Investment and Development, 14, 1-9.
Johnsson, Lindblom, & Platan. (2002). Beahvioural Finance- and the Change of Investor Behaviour During and After the Speculative Bubble at the End of the 1990s. (Master), Lund University. .
Kahneman, D. a., & Tversky, A. (1974). Judgment under uncertainty: heuristics and biases. Journal of Science,, 85(41), 1124-1131.
Khan, M. Z. U. (2015). Impact of availability bias and loss aversion bias on investment decision making, moderating role of risk perception. Journal of Research in Business Management, 1(2).
Lakonishok, J., Shleifer, A., & Vishny, R. W. (1994). Contrarian investment, extrapolation and risk. Journal of Finance,, 49(5), 1541-1578.
Lowies, G. A., Hall, J. H. a., & Cloete, C. E. (2016). Heuristic-driven bias in property investment decision-making in South Africa. Journal of Property Investment & Finance, 34(1), 51-67.
Merton, R. C. (1987). A simple model of Capital market equilibrium with incomplete information. The Journal of Finance, 42(3), 483-510.
Mittal, S. K. (2019). Behavior biases and investment decision: theoretical and research framework. Qualitative Research in Financial Markets, 14(2), 213-228. doi: 10.1108/QRFM-09-2017-0085
Montier, J. (2002). Behavioural Finance: Insight into Irrational Minds and Markets: Wiley.
Moore, D. A., & Healy, P. J. (2008). The trouble with overconfidence. Psychological Review, 115(2), 502.
Ngoc, L. T. B. (2014). Behavior pattern of individual investors in stock market. International Journal of Business and Management, 9(1), 1.
Nofsinger, J. R. (2001). The impact of public information on investors. Journal of Banking & Finance, 25(7), 1339-1366.
Odean, S. G. T. (2001). Learning to Be Overconfident. The Review of Financial Studies, 14(1), 1-27.
Odean, T. (1998). Are investors reluctant to realize their losses? Journal of Finance, 53(5), 1775-1798.
Odean, T. (2002). Volume, volatility, price and profit when all traders are above average. The Journal of Finance.
Parikh, P. (2011). Value Investing and Behavioral Finance. New Delhi Mcgraw Hill
Parveen, S., Satti, Z. W., & Bashir, T. (2021). Examining investors’ sentiments, behavioral biases and investment decisions during COVID-19 in the emerging stock market: a case of Pakistan stock market. Journal of Economic and Administrative Sciences.
Pompain, M. M. (2006). Behavioral Finance and Wealth Management (How to Build Optimal Portfolio That Account for Investor Biases), 1st ed. New Jersey, Canada.: JohnWiley&Sons.
Pompian, M. (2006). Behavioral Finance and Wealth Management: How to Build Optimal Portfolios that Account for Investor Biases. Hoboken: Wiley.
Ritter, J. R. (2003). Behavioral finance. Journal of Pacific-Basin Finance, 11(4), 429-437.
Salamouris, I. S., & Gulnur Muradoglu, Y. (2010). Estimating analyst’s forecast accuracy using behavioural measures (herding) in the United Kingdom. Managerial Finance, 36(3), 234-256.
Seppälä, A. (2009). Behavioral biases of investment advisors – the effect of overconfidence and hindsight bias. Doctoral dissertation.
Sharma, D. J., & Sarma, N. N. (2022). Behavioural Finance –A study on its Bases and Paradigms. International Journal of Scientific Research and Management (IJSRM), 10(3), 3517-3170.
Sharpe, W. F. (1964). Capital asset prices: a theory of market equilibrium under conditions of risk. The Journal of Finance, 19(3), 425-442.
Shefrin, H. (2000). Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing. Boston,MA.: Harvard Business School Press.
Shefrin, H. (2005). A Behavioral Approach to Asset Pricing. Burlington,MA: Elsevier.
Shefrin, H. (2007). Behavioral Corporate Finance: Decisions That Create Value. New York, NY.: McGraw Hill/Irwin.
Shefrin, H. (2008). Behavioral Approach Asset Pricing (Vol. 2nd ed). London: Elsevier.
Shefrin, H. S. M. (1985). The disposition to sell winners too early and ride losers too long: Theory and Evidence. Journal of Finance, 40, 777-791.
Shiller, R. J. (2000). Irrational Exuberance: Princeton University Press.
Slovic, P. a. L., S. . (1971). Comparison of Bayesian and regression approaches to the study of information processing in judgment. Organizational Behavior and Human Performance, 6(6), 649-744.
Statman, M., Thorley, S. a., & Vorkink, K. (2006). Investor overconfidence and trading volume. Review of Financial Studies, 19(4), 1531-1565.
Toma, F. M. (2015). Behavioral biases of the investment decisions of Romanian Investorson the Bucharest Stock Exchange. Procedia Economics and Finance, 32, 200-207.
Trinugroho, I. a., & Sembel, R. (2011). Overconfidence and excessive trading behavior: an experimental study. International Journal of Business andManagement, 6(7).
Tversky, A. a. K., D. . (1981). The framing of decisions and the psychology of choice. Science New York, N.Y, 211(4481), 453-458.
Waweru, N. M., Munyoki, E. a., & Uliana, E. (2008). The effects of behavioral factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange. International Journal of Business and Emerging Markets,, 1(1), 24-41.
Wermers, R. (1999). Mutual Fund Herding and the Impact on Stock Prices. Journal of Finance, 54(2), 581-622.
Yaowen, X. U. E., Suqing, S. U. N., Zhang, P., & Tian, M. E. N. G. (2015). Impact of cognitive bias on improvised decision-makers’ risk behavior: an analysis based on the mediating effect of expected revenue and risk perception. Management Science and Engineering, 9(2), 31-42.
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Affiliations
Andhi Wijayanto
Departement of Management, Faculty of Economic, Universitas Negeri Semarang, Indonesia
Mugi Harsono
Faculty of Economics and Business, Universitas Sebelas Maret Surakarta
How to Cite
1.
Wijayanto A, Harsono M. Study of Science Philosophy: Behavioral Bias and Investment Decisions. MAJ [Internet]. 27Dec.2022 [cited 19Nov.2024];11(4):337-48. Available from: http://journal.unnes.ac.id/sju/maj/article/view/64064
Study of Science Philosophy: Behavioral Bias and Investment Decisions
Vol 11 No 4 (2022): Management Analysis Journal
Submitted: Dec 27, 2022
Published: Dec 27, 2022
Abstract
bjectives This paper aims to develop a theoretical and research framework by identifying behavioral biases in investment decisions and reviewing the existing literature in the field of behavioral biases related to behavior finance from the perspectives of ontology, epistemology, and axiology. This is because behavioral biases in management, and in particular financial management, remain an interesting research area. The study by Parveen, Satti, and Bashir (2021) demonstrates that heuristics and behavioral biases do exist and impact the decisions made by Pakistani investors during COVID-19. Pakistani investors have suffered a loss due to their faulty thinking. The Pakistani stock market exhibited features of dual process theory and prospect
theory throughout this outbreak. Investors can employ both gut feelings and rational analysis. Since this study illuminates the impact of COVID-19 on emerging stock markets like Pakistan's, it contributes to the expanding body of scholarship on behavioral finance in developing nations.