Modeling Investors' Behavior by Using Psychological Variables with Interpretive Structural Modeling Approach to Recognize Investment Decision Making Errors

Subject Areas : Financial engineering

shirvan barari ¹ , Ghodratolah Taleb Nia ² , Hamid reza Vakili fard ³ , Hossein Izadi ⁴

1 - Department of Accounting, Qazvin Branch, islamic University Azad, Qazvin, iran.
2 - Department of Accounting, Science and Research Branch, islamic University Azad, tehran, iran.
3 - Department of Accounting, Science and Research Branch, islamic University Azad, Tehran, iran.
4 - Department of Accounting and Management, Islamshahr Branch, Islamic Azad University, Islamshahr, Iran

Received: 2019-12-02 Accepted : 2020-02-02 Published : 2020-09-22

Keywords: decision making, Investors, behavioral bias, Interpretive structural modeling of access matrix, Self-interaction matrix, Access matrix,

Abstract :

Interpretive structural modeling is one of the methods of system design, especially management and accounting systems. This technique starts by identifying the variables and then establishes the underlying relationships between the variables using the expertise and knowledge of the experts and finally the multilevel structural model. In this study, using this approach, behavioral biases are structured to influence the decision making of real active investors in the stock market. For this purpose, expert experts in this field were used and 12 behavioral influences affecting investor behavior / decision making were identified and then coded using the matrix of initial access, their impact on investor behavior / decision model. Finally, they were leveled using the final matrix. The results of interpretive structural modeling showed that behavioral bias affecting investors' decision making was modeled at six levels, and imaginative power bias was at the highest level and more effective than other bias and late bias bias.

References:

 [1].ام . پمپین، میشل ؛ (1397). دانش مالی رفتاری و مدیریت دارایی، مترجم : احمد بدری، تهران، کیهان

[2].آذر، عادل(1392). تحقیق در عملیات  نرم، تهران: انتشارات سازمان مدیریت صنعتی.

[3].بدری، احمد، (۱۳۸۸)، دانش مالی رفتاری و مدیریت دارایی، انتشارات کیهان، تهران

[4].حسینی چگینی، الهام؛ حقگو، بهناز؛ رحمانی نژاد، لیلا   (1393). بررسی تورش‌های رفتاری سرمایه گذاران در بورس اوراق بهادار تهران بر مبنای مدل معادلات ساختاری. راهبرد مدیریت مالی سال دوم، شماره 7،  زمستان 1393، صص 113-133.

[5].راعی، رضا و فلاح پور، سعید (1393) ، »مالی رفتاری رویکردی متفاوت در حوزه مالی تحقیقات مالی، شماره ۱۸، سال ششم، صفحات ۱۰۶-۷۷.

[6]. رضائیان، صبها و همکاران (1398).ا لگوی مفهومی تصمیم‌گیری با رویکرد شناختی. تازه های علوم  شناختی، دوره 21،  شماره 1، صص 1-20.

[7].قالمق، کریم؛  احمد یعقوب نژاد**، میرفیض فلاح شمس(1395). تأثیر سواد مالی بر تورشهای رفتاری سرمایه گذاران بورس اوراق بهادار تهران. چشم انداز مدیریت مالی، شماره 16، صص75-94.

[8].شهریاری، سارا (1386)"بررسی و آزمون رفتار توده وار سرمایه گذاران با استفاده از انحرافات بازده سهام، از بازده کل بازار در بورس اوراق بهادار تهران طی سال های(1384-1380)، بررسی های حسابداری  و حسابرسی، دوره 14، شماره 49، صص44-25.

[9].شهرآبادی، ابوالفضل؛ یوسفی، راحله(1386). مالی ة رفتاری رویکردی متفاوت در حوز ة مالی، تحقیقات مالی، دانشکدة مدیریت دانشگاه تهران، شمارة 18، صص75-100.

 

[10].Agarwal A, Shankar R. and Tiwari,M.K.,Modeling Agility of supply chain, Industrial Marketing ManageMent, 36, 443- 457(2006).

[11]Faisal M.N., Banwat D.K. and Shankar R., InforMation risks Management in Supply Chain: An assessment and mitigation framework, Journal of Enterprise Information Management, 20(6), 677-699 (2007).

[12]Huang J., Tzeng G., Ong Ch.; Multidimensional Data in Multidimensional Scaling Using the Analytic

Network Process; Pattern Recognition Letters, Vol.26, (2005).

 [13].Hayat, A. Anwar M. (2016). Impact of Behavioral Biases on Investment Decision; Moderating Role of Financial Literacy” Working Paper; Department of Business Administration, International Islamic University Islamabad Pakistan

 [14]Jitesh Thakkar, Arun Kanda, Deshmukh, S.G., “Evaluation of Buyer-Supplier Relationships Using Integrated Mathematical Approach of Interpretive Strutural Modelling(ISM) and Graph Theoretic Matrix: The Case Study of Indian Automotive SMEs”, Journal of Manufacturing Technology Management, Vol. 19, No.1, 2010, pp.92-124.

[15]Raj T., Shankar R. and Suhaib M., An ISM Approach for Modeling the Enablers of Flexible Manufacturing System: The case for India, International Journal of Production Research,46(24),1-30 (2007).

 [16]Ravi T., Shankar R. and Tiwari M.K., Productiity Improvement of a Computer Hardware Supply Chain, International Journal of Production and Performance Measurement, 54(4), 239-255 (2005).

 [18]Singh R.K., Garg S.K., Deshmukh S.G. and Kumar M., Modeling of Critical Success Factors for ImpleMentation of AMTs, Journal of Modelling in Management, 2 (3), 232-250(2007).

I19]. Shefrin, Hersh and Statman, Meir(1985), The Disposition to Sell Winners Too Early and Ride Spsers Too Long Theory and Evidence, Journal of Finance, vol:40

 [20]Sharma H.D., Gupta A.D. and Sushil, The Objetives of Waste Management in India: a Future Inquiry, Technological Forecasting and Social Change, 48, 285–309 (1995).

 [21]Watson R, Interpretive Structural Modeling- A useful tool for Worth Assessment? Technological Forcasting

and Social Change, 11, 165-185 (1978).

[22].Warfield J.N.; Toward Interpretation of Complex Structural Modeling; IEEE Trans. Systems Man Cybernet. Vol.4, No.5, (1974).

[23].Verhofen, M. (2014). Finance, University of St. Gallen-Swiss Institute of Banking and Finance. Electronic Copy Available at: http:// ssrn.com/abstract=2415741.

[21]Waweru, N.M., Munyoki, E. (2014). The effects of behavioral factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange, Business and Emerging Markets, Vol. '(), pp: 24-40.

 

 

 

 

 

 

 

[1]. M. Pompin, Michel; (2017). Behavioral financial knowledge and asset management, translator: Ahmad Badri, Tehran, Kayhan

[2]. Azar, Adel (2012). Research in soft operations, Tehran: Industrial Management Organization Publications.

[3]. Badri, Ahmad, (2008), Behavioral financial knowledge and asset management, Keihan Publications, Tehran

[4]. Hosseini Chegini, Elham; Haqgo, Behnaz; Rahmaninejad, Leila (2014). Investigating behavioral patterns of investors in Tehran Stock Exchange based on structural equation model. Second year financial management strategy, number 7, winter 2013, pp. 113-133.

[5]. Rai, Reza and Fallahpour, Saeed (2013), "Behavioral finance, a different approach in the field of finance, financial research, number 18, year 6, pages 77-106.

[6]. Rezaian, Sabaha et al. (2018). A conceptual model of decision-making with a cognitive approach. Cognitive Science Updates, Volume 21, Number 1, pp. 1-20.

[7]. Qalmoq, Karim; Ahmad Yacoubnejad**, Mirfaiz Falah Shams (2015). The effect of financial literacy on the behavioral patterns of Tehran Stock Exchange investors. Financial Management Perspective, No. 16, pp. 75-94.

[8]. Shahriari, Sara (1386) "Investigation and test of the mass behavior of investors using the deviations of stock returns from the total market return in Tehran Stock Exchange during the years (1380-1384), accounting and audit investigations, Volume 14, No. 49, pp. 25-44.

[9]. Shahrabadi, Abulfazl; Yousefi, Rahela (1386). Behavioral finance, a different approach in the field of finance, financial research, Faculty of Management, University of Tehran, No. 18, pp. 75-100.

 

[10]. Agarwal A, Shankar R. and Tiwari, M.K., Modeling Agility of supply chain, Industrial Marketing Management, 36, 443-457(2006).

[11] Faisal M.N., Banwat D.K. and Shankar R., Information risk management in supply chain: An assessment and mitigation framework, Journal of Enterprise Information Management, 20(6), 677-699 (2007).

[12] Huang J., Tzeng G., Ong Ch.; Multidimensional Data in Multidimensional Scaling Using the Analytic

Network Process; Pattern Recognition Letters, Vol.26, (2005).

 [13]. Hayat, A. Anwar M. (2016). Impact of Behavioral Biases on Investment Decision; Moderating Role of Financial Literacy" Working Paper; Department of Business Administration, International Islamic University Islamabad Pakistan

 [14] Jitesh Thakkar, Arun Kanda, Deshmukh, S.G., "Evaluation of Buyer-Supplier Relationships Using Integrated Mathematical Approach of Interpretive Structural Modeling(ISM) and Graph Theoretic Matrix: The Case Study of Indian Automotive SMEs", Journal of Manufacturing Technology Management , Vol. 19, No. 1, 2010, pp. 92-124.

[15] Raj T., Shankar R. and Suhaib M., An ISM Approach for Modeling the Enablers of Flexible Manufacturing System: The case for India, International Journal of Production Research, 46(24), 1-30 (2007).

 [16] Ravi T., Shankar R. and Tiwari M.K., Productivity Improvement of a Computer Hardware Supply Chain, International Journal of Production and Performance Measurement, 54(4), 239-255 (2005).

 [18] Singh R.K., Garg S.K., Deshmukh S.G. and Kumar M., Modeling of Critical Success Factors for Implementation of AMTs, Journal of Modeling in Management, 2 (3), 232-250(2007).

I19]. Shefrin, Hersh and Statman, Meir(1985), The Disposition to Sell Winners Too Early and Ride Losses Too Long Theory and Evidence, Journal of Finance, vol:40

 [20] Sharma H.D., Gupta A.D. and Sushil, The Objectives of Waste Management in India: a Future Inquiry, Technological Forecasting and Social Change, 48, 285–309 (1995).

 [21] Watson R, Interpretive Structural Modeling- A useful tool for Worth Assessment? Technological Forecasting

and Social Change, 11, 165-185 (1978).

[22]. Warfield J.N.; Toward Interpretation of Complex Structural Modeling; IEEE Trans. Systems Man Cybernet. Vol.4, No.5, (1974).

[23]. Verhofen, M. (2014). Finance, University of St. Gallen-Swiss Institute of Banking and Finance. Electronic Copy Available at: http://ssrn.com/abstract=2415741.

[21] Waweru, N.M., Munyoki, E. (2014). The effects of behavioral factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange, Business and Emerging Markets, Vol. (), pp: 24-40