Analysis of behavioral factors influencing investment decisions

article in a collection out of WoS and Scopus

English

Purpose of the article: The aim of the article is a critical analysis of the views of various authors who have linked their research activities to the topic of behavioral finance, behavioral biases, and risk perceptions in financial markets. Methodology/methods: In the paper, the author used logical methods of secondary research such as analysis and synthesis, ie the division of the object of research into individual elements and, conversely, the monitoring of connections between individual components (Hendl, 2005). Scientific aim: The scientific benefit is a detailed comprehensive overview of biases that can affect investors' behavior and risk perception, and a demonstration of risk understanding approaches. The report can serve as a basis for further research and scientific work. Each topic is given the perspective of different authors, which supports the objectivity of the conclusions. Findings: Based on a literature review by multiple authors, the author defined the main behavioral biases. Some of the authors categorize or classify individual biases according to whether they are based on feelings or facts, or according to whether they are heuristics, ie mental abbreviations for solving a problem, or cognitive bias, which may be the result of erroneous heuristics. Conclusions: The author conducted research of secondary sources, such as of publications and scientific articles dealing with issues of behavioral finance and risk perception. The connection between major behavioral biases and risk perception, and the connection between socio-demographic characteristics and the level of influence of individual investor behavioral biases have been described. All of these factors have been found to affect individual investors' perceptions of information to the extent that some individuals perceive the same information differently when making decisions based solely on financial disclosure and make different decisions based on that.

behavioral finance, prejudice, bias, behavioral cognitive bias, emotional bias

SVOBODA, J.

10. 12. 2021

Vysoké učení technické v Brně Fakulta podnikatelská

Brno

978-80-214-6069-0

Workshop specifického výzkumu 2021

185