scholarly journals HOUSEHOLD BARGAINING, FINANCIAL DECISION-MAKING AND RISK TOLERANCE

2017 ◽  
Vol 16 (2) ◽  
Author(s):  
Selamah Abdullah Yusof
Keyword(s):  
Decision Making ◽  
Investment Decision ◽  
Risk Tolerance ◽  
Bargaining Model ◽  
Men And Women ◽  
Financial Investment ◽  
Financial Decision Making ◽  
Income Pooling ◽  
Financial Investments ◽  
Financial Decision

This study examines the financial investment decision-making and risk behaviors ofMalaysian men and women. It uses data obtained from a survey of employed Malaysians totest two opposing models of household decision making, the income pooling hypothesis andthe bargaining model. Ordinal probit regressions are estimated to determine if earning shareaffects decisions on financial investments, and to identify factors that affect risk tolerance ofmen and women. The results indicate that although both men and women practice autonomyin decisions related to financial investments, women have lower risk tolerance than men.The results on decision making are consistent with the bargaining model as reflected in theimportance of relative earning share in financial decision making.Keywords: Malaysia; Income Pooling Hypothesis; Bargaining Model; Financial Decision-Making; Risk Tolerance; Household.

scholarly journals An Empirical Investigation of Investor’s Behavioral Biases on Financial Decision Making

2018 ◽  
Vol 8 (3) ◽  
pp. 99-109
Author(s):  
Imran Umer Chhapra ◽  
Muhammad Kashif ◽  
Raja Rehan ◽  
Ashow Bai
Keyword(s):  
Decision Making ◽  
Cognitive Bias ◽  
Positive Impact ◽  
Stock Exchange ◽  
Investment Decision ◽  
Sampling Technique ◽  
Financial Advisors ◽  
Financial Decision Making ◽  
Behavioral Biases ◽  
Financial Decision

Investor’s irrationality is an inevitable reality that has been time and again highlighted by researchers (Statman, 2008). Therefore, this study is another effort to assess the role of behavioral biases in financial decision making in Pakistan Stock Exchange (PSX).A survey questionnaire is designed and used to collect responses using convenience sampling technique from sample of 250 investors of PSX. Behavioral biases include overconfidence, over thinking, herding, cognitive bias, and hindsight effect of investors. Multiple regression models are used to test influence of five behavioral biases on investment decision. The results show that overconfidence, over thinking, herding, cognitive bias, and hindsight effect have significant positive impact on investment decision. Overall results conclude that much change in investment decision is due to behavioral biases. This study will help financial advisors to better advice their clients. The one way to reduce these biases may be education and training of investors.

scholarly journals The determinants of risk tolerance: A behavioural analysis

2012 ◽  
Vol 9 (2) ◽  
pp. 476-485 ◽  
Author(s):  
Everton Anger Cavalheiro ◽  
Kelmara Mendes Vieira ◽  
Paulo Sérgio Ceretta
Keyword(s):  
Decision Making ◽  
Regression Analysis ◽  
Prospect Theory ◽  
Risk Tolerance ◽  
Financial Decision Making ◽  
Behavioural Analysis ◽  
Determining Factors ◽  
Financial Decision ◽  
Santa Maria ◽  
Level Of Risk

The traditional perspective of financial theory suggests an implicit rationality on decision making. Historically, researches have revolved around demographic, social and economic heuristics, thus neglecting the emotional, cognitive and behavioral suppositions, related to financial decision making. In this sense, this study aims to evaluate which are the determining factors for risk tolerance. So, we carried out a survey on 815 individuals residing in Santa Maria, Julio de Castilhos and Cruz Alta, Brazil. Afterwards, we performed a CFA and, eventually, a regression analysis. Generally and consistently, the suppositions for rationality were refuted, though consistent to the Prospect Theory, validating the numerous studies that demonstrate the violation of the rationality suppositions. The heuristics which are traditionally used in order to determine the level of risk tolerance have not shown to be significant in this research. The cognitive, emotional and behavioral dimensions of decision making have shown to be significant.

The role of mixed emotions in financial decision making

2011 ◽  
Author(s):  
Gergana Y. Nenkov ◽  
Deborah MacInnis ◽  
Maureen Morrin
Keyword(s):  
Decision Making ◽  
Mixed Emotions ◽  
Financial Decision Making ◽  
Financial Decision
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