scholarly journals Behavioural Finance: A Re-Examination of Prospect Theory

2017 ◽  
Vol 07 (05) ◽  
pp. 1134-1149 ◽  
Author(s):  
Rama Seth ◽  
Bobbur Abhilash Chowdary
Keyword(s):  
Prospect Theory ◽  
Behavioural Finance

The Impact of Behavioural Finance on Investment Decision-making: A Study of Selected Investment Banks in Nigeria

2019 ◽  
pp. 097215091985138
Author(s):  
Olubunmi Edward Ogunlusi ◽  
Olalekan Obademi
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Significant Relationship ◽  
Positive Impact ◽  
Investment Decision ◽  
Negative Relationship ◽  
Investment Banks ◽  
Behavioural Finance ◽  
Investment Decision Making ◽  
The Impact

In this study, the impact of behavioural finance on investment decision-making using a selected investment banks was investigated. A total of 200 questionnaire items were administered to the respondents of the four surveyed investment banks including Afrinvest West Africa Limited, Meristem Securities, Vetiva Capital and ARM Nigeria Limited, out of which 180 questionnaire items representing 90 per cent were retrieved. The data were analyzed using tables, percentages, correlation and multiple regression analysis. The overall empirical results provided evidence of a positive impact between behavioural finance and investment decision, supporting previous research and contributing to generalization. The other findings of the research are thus: there is a significant relationship between heuristics and individual investment decision; there is a significant relationship between prospect theory and individual investment decision; and lastly there is a strong and negative relationship between heuristics and investment decision. Similarly, the relationship between prospect theory and investment decision is negative and strong. Against the backdrop of the aforementioned findings and conclusion, the following recommendations are proposed to both the institutional and individual investors: investors should be enlightened on the fact that there are many behavioural factors which can affect their investment decision-making process and they should be made aware of these factors including heuristics and prospect theory.

scholarly journals Do Accounting and Finance Master’s Students Apply Prospect Theory?

Revista CEA ◽  
2020 ◽  
Vol 6 (11) ◽  
pp. 45-69
Author(s):  
Maria Teresa V. D. Alves
Keyword(s):  
Risk Aversion ◽  
Prospect Theory ◽  
Isolation Effect ◽  
Reflection Effect ◽  
Alternative Response ◽  
Master's Students ◽  
Behavioural Finance ◽  
Descriptive Research

This study aims to question the assumptions of prospect theory using a sample of students enrolled in a master’s course on accounting and finance at a Portuguese polytechnic institution. Such theory has stood out among others developed in the field of Behavioural Finance due to the debate and investigation it has generated. To achieve this aim, we applied a questionnaire four consecutive years (2012–2015). The instrument included a set of alternative response questions that seek to unveil respondents’ preferences regarding the situations they were presented with. Bibliographic and descriptive research was carried out and the results were compared with those obtained by other authors but they were not always consistent. Thus, the isolation effect was confirmed; the reflection effect was almost always confirmed; and the certainty effect was not always confirmed. Regarding attitude toward risk, the assumptions of risk aversion, and importance given to changes in wealth (at the expense of wealth states), our results are in line with those obtained by said authors. Hence, this study contributes to support prospect theory with its results and the confirmation of the isolation effect.

Kumulative Prospect Theory

2006 ◽  
Vol 35 (6) ◽  
pp. 331-334 ◽  
Author(s):  
Wolfgang Breuer ◽  
Marc Gürtler
Keyword(s):  
Prospect Theory

The profitability of algorithmic trading systems based on football sentiment

2020 ◽  
Vol 42 (1) ◽  
pp. 33-46
Author(s):  
Raúl Gómez-Martínez ◽  
Camila Marqués-Bogliani ◽  
Jessica Paule-Vianez
Keyword(s):  
Financial Markets ◽  
Investment Decisions ◽  
Futures Market ◽  
Algorithmic Trading ◽  
Investment Strategies ◽  
Measurable Effect ◽  
Behavioural Finance ◽  
Trading Systems ◽  
European Football

Behavioural finance has shown that investment decisions are the result of not just rational but also emotional brain processes. On the assumption that emotions affect financial markets, it would seem likely that football results might have a measurable effect on financial markets. To test this, this study describes three algorithmic trading systems based exclusively on the results of three top European football teams (Juventus, Bayern München and Paris St Germain) opening long or short positions in the next market season of the futures market of the index of each country (MIB (Milano Italia Borsa), DAX (Deutscher Aktien Index) and CAC (Cotation Assistée en Continu). Depending on the outcome of the last game played a long position was taken after a victory and a short position after a draw or defeat. The results showed that the algorithmic systems were profitable in the case of Juventus and Bayern whereas in the case of PSG, the system was profitable, but in an inverse way. This study shows that investment strategies that take account of sports sentiment could have a profitable outcome.

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