“…The results are similar to Waweru et al (2008), which concluded that representativeness, overconfidence; anchoring and availability bias affected the decisions of the institutional investors. In addition, it is also consistent with the finding of Rasheed et al (2018) and Ikram (2016), who found that the representative bias and availability bias both have a significant positive impact on investor investment decisions. Khan (2015) found that availability, anchoring and representative bias have significant impact on the investment decisions of individual investors.…”
Section: Analysis Of Impact Of Heuristics On Investment Decision Makingsupporting confidence: 90%
“…The questionnaires were prepared in both English and Nepali languages, and distributed physically and collected later after getting them filled the response rate was 100 per cent. The paper is based on primary data using structured questionnaires, which is adapted from Rasheed et al (2018) and Waweru et al (2008). The first section of the questionnaire is related to the demographic profile of the respondents such as gender, age, marital status, qualification, occupation, and investment experience.…”
Section: Methodsmentioning confidence: 99%
See 1 more Smart Citation
Dangol1,
Manandhar2
2020
J. Bus. Soc. Sci. Res.
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This paper aims to assess the impact of heuristics on the investment decision by analysing the effect of four heuristic biases, i.e., representativeness, availability, anchoring and adjustment, and overconfidence bias on rationality of Nepalese investor's investment decision-making and also examines the moderating effect of the internal locus of control in between. The study used 391 respondents based on a convenient sampling procedure, and structured questionnaire survey. The study result indicates that there is a significant relationship between irrationality in investment decision-making and all four heuristic biases. In addition, the study also concludes that locus of control has significant moderating effect in the relationship between investment decisions and three heuristic biases, i.e., availability, representative and anchoring bias. However, the study documents no moderation effect in case of relationship with overconfidence bias.
“…The results are similar to Waweru et al (2008), which concluded that representativeness, overconfidence; anchoring and availability bias affected the decisions of the institutional investors. In addition, it is also consistent with the finding of Rasheed et al (2018) and Ikram (2016), who found that the representative bias and availability bias both have a significant positive impact on investor investment decisions. Khan (2015) found that availability, anchoring and representative bias have significant impact on the investment decisions of individual investors.…”
Section: Analysis Of Impact Of Heuristics On Investment Decision Makingsupporting confidence: 90%
“…The questionnaires were prepared in both English and Nepali languages, and distributed physically and collected later after getting them filled the response rate was 100 per cent. The paper is based on primary data using structured questionnaires, which is adapted from Rasheed et al (2018) and Waweru et al (2008). The first section of the questionnaire is related to the demographic profile of the respondents such as gender, age, marital status, qualification, occupation, and investment experience.…”
Section: Methodsmentioning confidence: 99%
Dangol1,
Manandhar2
2020
J. Bus. Soc. Sci. Res.
View full textAdd to dashboardCite
This paper aims to assess the impact of heuristics on the investment decision by analysing the effect of four heuristic biases, i.e., representativeness, availability, anchoring and adjustment, and overconfidence bias on rationality of Nepalese investor's investment decision-making and also examines the moderating effect of the internal locus of control in between. The study used 391 respondents based on a convenient sampling procedure, and structured questionnaire survey. The study result indicates that there is a significant relationship between irrationality in investment decision-making and all four heuristic biases. In addition, the study also concludes that locus of control has significant moderating effect in the relationship between investment decisions and three heuristic biases, i.e., availability, representative and anchoring bias. However, the study documents no moderation effect in case of relationship with overconfidence bias.
“…Without time to make a sophisticated probability assessment, investors make decisions based on immediately available information and estimate other values using mental short cuts like heuristics (Oehler et al, 2018). Heuristic bias is comprised of availability and representative bias (Rasheed et al, 2018). Availability bias refers to a concept or thought that comes immediately to mind when an individual makes decisions, and representativeness heuristic bias occurs when the same objects or events confuses people's thinking regarding the probability of an outcome.…”
Section: Cognitive Bias and Investment Decision-makingmentioning confidence: 99%
Ishfaq
1
,
Nazir
2
,
Qamar
3
et al. 2020
Front. Psychol.
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The paper examines the direct and indirect effects (via investors' risk perception) of heuristic biases on investors' irrational behavior in decision-making. The study also investigates the moderating effect of investors' extraversion on both the direct and the indirect associations between heuristic biases and irrational decision-making. Based on survey data collected from 247 investors registered in various brokerage houses in Pakistan and the analyses (mediation and moderation) performed using the Process Macro technique (proposed by Hayes, 2017) in SPSS, the results of this study reveal that heuristic biases positively affect investors' irrational decision-making both directly and indirectly via risk perception. The results reveal that extraversion moderates both direct and indirect associations between heuristic biases and investors' irrational behavior in decision-making. Our findings carry useful practical implications for organizations' policymakers.
“…Representativeness is associated with capital markets. Rasheed et al (2018) stated that investors tend to use mental shortcuts and practical rules when making decisions to invest in companies, based only on their characteristics such as the type of management, past returns, or the popularity of the company.…”
Section: Representativeness Fundamental Anomalies and Technical Anomentioning confidence: 99%
“…Previous research related to heuristics, such as the research conducted by Rasheed et al, (2018); Gigerenzer & Gaissmaier, (2011); Kurz & Gigerenzer (2007), focused on how heuristics (availability, representativeness, hindsight) influence investors' decision making, furthermore research using a mediating variable is still scarcely available. Only one study was conducted involving mediation variables; this study was conducted by Abdin et al, (2017).…”
Section: Introductionmentioning confidence: 99%
Lazuarni
1
,
Asri
2
2020
J. Indones.Econ.Bus.
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