Modeling the effects of behavioral biases on individual investment decisions in companies with a structural equation approach
Modeling the Effects of Behavioral Biases on Individual Investment Decisions in Tehran Stock Exchange (Structural Equation Approach)
Subject Areas : Management Accounting
Ali Shojaee
1
(
Doctoral student of accounting department, Borujard branch, Islamic Azad University, Borujard, Iran
)
Alireza Ghiyasvand
2
(
Assistant Professor, Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran (Corresponding author).
)
farid sefati
3
(
Assistant Professor of Accounting Department, Borujard Branch, Islamic Azad University, Borujard, Iran
)
Keywords: rational decisions, capital market efficiency, behavioral finance, psychological factors, behavioral biases.,
Abstract :
Behavioral biases are among the factors influencing the individual decisions of investors in the financial markets. The purpose of this research is to provide a model of the effects of individual behavioral biases on individual investment decisions in the Iranian capital market using structural equation modeling. For this purpose, a sample of individual investors was selected using the accessible method, and data on their behavioral biases and investment decisions was collected through the field method and through 400 questionnaires. The validity of the questionnaire was confirmed through expert opinions and its reliability was confirmed through Cronbach's alpha. The collected data were statistically analyzed through Amos 24 software and the structural equation modeling method. The results of the research showed that judgmental biases have a positive and significant effect on individual investment decisions at a 95% confidence level with a path coefficient of 0.502. In other words, constructs of overconfidence, anchoring, familiarity, eventism, imaginability, procrastination, formalism, projection error, and control error, which have factor loadings greater than 0.4, are accepted as constructs that make up the latent variable of judgmental bias and affect decisions. Individual investment (amount of investment, frequency of monthly stock trading, Rial volume of monthly stock trading, number of stocks in the portfolio, number of industries in the portfolio) have a positive and significant effect.