A Study of Confusion in Investment Behavior of Mongolian People

Banzragch Mijiddorj, Bolormaa Ayurzana, Uyanga Davaasuren and Zaya Mashlai
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Banzragch Mijiddorj: Graduate School of Business, Mongolian University of Science and Technology, Ulaanbaatar, Mongolia.
Bolormaa Ayurzana: School of Foreign Languages, Mongolian University of Science and Technology, Ulaanbaatar, Mongolia.
Uyanga Davaasuren: Graduate School of Business, Mongolian University of Science and Technology, Ulaanbaatar, Mongolia.
Zaya Mashlai: School of Business Administration and Humanities, Mongolian University of Science and Technology, Ulaanbaatar, Mongolia.

International Journal of Science and Business, 2025, vol. 44, issue 1, 17-27

Abstract: Behavioral finance has gained significant attention as researchers explore how cognitive biases and emotional factors influence individual decision-making and financial markets. Unlike traditional finance, which assumes rational behavior, behavioral finance emphasizes the psychological elements that often lead to irrational investment decisions. This study applied a structured questionnaire to analyze the investment behavior of Mongolian individuals, examining twenty distinct behavioral biases. Using a scoring system and behavioral type identification tests, the study identified five key biases that affect investor decision-making: loss aversion, regret aversion, overconfidence, optimism, and illusory control. The results indicated that loss aversion and regret aversion were the most prominent biases, followed by optimism and illusory control. Overconfidence was found to have a relatively smaller effect on decision-making. These findings suggest that psychological factors play a significant role in shaping investment choices among Mongolian investors.

Keywords: Behavior; illusion; behavioral finance; illusory management; erroneous cognitive reflections (search for similar items in EconPapers)
Date: 2025
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