Pension scheme trustees are responsible for the investment decisions of future generations’ retirement assets. However, behavioural finance research has mostly focussed on retail investors. While ...trustees are relatively sophisticated investors, they are not immune from biases. Across three experiments, we tested 252 pension scheme trustees for the influence of extraneous manipulations to the menu of options on investment decisions. Trustees were influenced by changes to the menu item mix, context, and layout. Care should therefore be taken when preparing information presented to trustees, in order to reduce biases that can be detrimental to pension outcomes.
•Pension trustees have mostly been overlooked by behavioural finance research.•We explore the impact of menu-effects on the decisions of 252 pension trustees.•Trustees are sophisticated investors, but not immune from behavioural finance biases.•Trustees’ choices were influenced by changes to menu item mix, context, and layout.•How information is presented can have an extraneous impact on trustees’ decisions.
Investments in renewable energy (RE) technologies are regarded with increasing interest as an effective means to stimulate growth and accelerate the recovery from the recent financial crisis. Yet, ...despite their appeal, and the numerous policies implemented to promote these technologies, the diffusion of RE projects remains somehow below expectations. This limited penetration is also due to a lack of appropriate financing and to a certain reluctance to invest in these technologies. In order to shed light on this phenomenon, in this paper we examine the decision making process underlying investments in RE technologies. We propose and test a conceptual model that examines the structural and behavioural factors affecting the investors decisions as well as the relationship between RE investments and portfolio performance. Applying econometric techniques on primary data collected from a sample of European investors, we study how the investors’ a-priori beliefs, their preferences over policy instruments and their attitude toward technological risk affect the likelihood of investing in RE projects. We also demonstrate that portfolio performance increases with an increase of the RE share in the portfolio. Implications for scholars, investors, technology managers and policy makers are derived and discussed.
This paper investigates how dividend policies may influence the creation and propagation of cycles between real economy and financial markets. We focus on the effect of a constant dividend policy on ...the stability of the aggregate economy, by means of a discrete dynamical framework in which managers, individuals and financial mediators coexist. We show the counter-intuitive effect of the dividend payout ratio: in a developed economy, an increase in dividends leads to a lower stock price level due to the cross-feedback effect between markets. Moreover, in non-developed economies the choice of managers and individuals may not influence the propagation of fluctuations, while in developed economies, high payout ratios and high sensitivity to market trends trigger a cross-feedback effect between the two markets that amplifies their volatility and drags the whole economy into fluctuations and cycles.
•The paper investigates, in a discrete dynamical framework, how dividend payout policies influence the creation and propagation of cycles between the real economy and financial markets.•In developed economies, an increase in dividends leads to a lower price level in equilibrium due to the cross-feedback effect between markets.•The stability of the system is guaranteed by a low dividend rate or when the decision of individuals regarding financial investments is not highly sensitive to the stock trend.•The instability of the economy depends on the development level of the country: in non-developed economies the choice of managers and individuals may not influence the propagation of fluctuations.•In developed economies, high payout ratios and high sensitivity to market trends trigger a cross-feedback effect between the two markets, amplifying their volatility and dragging the whole economy into fluctuations and cycles.
•We examine the impact of textual sentiment on price deviations for dual-listed stocks.•Anglo-American and Anglo-Australian twin stocks exhibit a negative relationship between news (Twitter) ...sentiment differentials and deviations from theoretical price parity.•Anglo-South African twin stocks display a positive relationship using news sentiment differentials.•We shed light on the role of online sentiment in understanding price deviations and offer valuable insights for investors and analysts.
This study offers a robust examination of the impact of textual sentiment on price deviations for dual-listed stocks. We analysed four (three) pairs of twin stocks to establish the association between news (Twitter) sentiment differentials and theoretical price ratios. The results reveal that: Anglo-American and Anglo-Australian twin stocks exhibit a negative relationship between news (Twitter) sentiment and deviations from theoretical price parity, while the Anglo-South African twin stocks display a positive relationship using news sentiment differentials. We shed light on the role of online sentiment in understanding price deviations and offer valuable insights for investors and analysts.
Analysis of Investments
International journal of recent technology and engineering,
9/2019, Letnik:
8, Številka:
2S8
Journal Article
Odprti dostop
The investigation is an examination of speculation conduct of individual speculators of securities exchange to enquire whether there is any effect of three autonomous factors to be specific ...Demographic Factors, Awareness and Perceived Risk Attitude on just a single ward variable Investment Behavior. The investigation has gathered essential information from 400 arbitrarily chose individual financial specialists of securities exchange from different regions of West Bengal utilizing an organized poll on five point Likert scale. The investigation finds that the mindfulness levels of the individual speculators are on moderate level and money related mindfulness is more than social learning. Seen Risk Attitude is primarily guided by Affect instead of Cognition. The investigation show that Demographic Factors, Awareness and Perceived Risk Attitude altogether impact Investment Behavior of individual speculators of financial exchange
PurposeThis study aims to explore the importance of past behaviour and financial literacy in the investment decision-making of individual investors and examines the validity of the theory of planned ...behaviour in this context.Design/methodology/approachThe study used a self-administered questionnaire and adopted the convenience sampling technique followed by a snowball sampling method for the survey to collect data from the individual investors covering the four distinct states of India. Collected data were analysed on AMOS 20.0 using two-step structural equation modelling (SEM).FindingsResults indicated a significant effect of all the predictive variables. Past behaviour showed no significant direct impact on investor's intention; however, it had an indirect significant relationship while mediated by the attitude of investors. The multiple squared correlation (R2) showed that the final model could explain 36% of the variance in investors' intention towards stock investment which signified a successful implementation of the TPB model along with external variables added to it. Moreover, Indian investors were found to be highly influenced, primarily, by social pressure which could be curbed through financial literacy.Practical implicationsA significant importance of subjective norms was found on stock market participation which could be a strategic theme for the government and the policymakers to educate investors through their opinion leaders for increasing their participation. Moreover, by doing so investors could control their behaviour and take rational decisions.Originality/valueThis study extended the understandings of investor's decision-making behaviour using TPB by incorporating the two external variables viz., Financial literacy and past behaviour. The addition of past behaviour is perhaps the novelty of this article since such examination has not been conducted empirically especially in the case of developing countries like India.
12 public and private banks are currently present in the stock exchange market in the “bank and credit institution” group. This study examines the behavioral bias of legal clients of stock exchange ...investors according to the literature on the behavioral finance. The grounded theory approach has been used to examine the patterns of behavioral bias of legal clients. The research data are the narratives of the participants (legal clients of stock market investors) for 2021. Nineteen people were selected using the purpose-based sampling method, and their narratives were collected through semi-structured interviews and coded by MaxQda software and analyzed in three stages. The findings of the study have shown that institutional investor behavioral bias is formed on social, emotional and psychological bias platforms, whose drivers are social factors, market, knowledge and experience, and psychological factors. To reduce the impact of behavioral bias, strategies for portfolio diversification strategies, investment strategies, investment analysis, and the use of information, are used which in turn result in improved capital market efficiency and investor success. Furthermore, the strategies are influenced, on the one hand, by cultural, political and economic factors, and on the other hand by the financial characteristics of the company, the policy of the company, and the institutional characteristics.
The current study uses a systematic literature review to summarize and highlight studies on overconfidence bias in investment decision-making. More specifically, the study synthesizes the ...overconfidence literature highlighting the year of publication, country of the published articles, research methods, data sources, prominent theories, statistical techniques, citation analysis of the popular articles and authors and future research topics. The authors study 111 documents indexed in Scopus and/or Web of Science databases to recognize research trends regarding overconfidence bias during the last 29 years (1995–2023). The results indicate that most (61.26%) selected studies are empirical. Likewise, secondary data-based articles dominate primary ones. Additionally, the resulting factors can be classified into four themes: the construct of overconfidence bias and investments; success: a cause of overconfidence; gender and overconfidence; and the consequences of overconfidence. To the authors’ best knowledge, this is a unique article in which research outcomes of essential aspects of overconfidence are skimmed systematically.
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