Psychological Biases, Main Factors of Financial Behaviour - A Literature Review

Blerina Dervishaj
Additional contact information
Blerina Dervishaj: Msc. Department of Finance, University of Vlora Ismail QemaliPavarësia Square, Vlora, Albania

European Journal of Natural Scinces and Medicine Articles, 2021, vol. 4

Abstract: In the context of the sophistication of financial relationships, investment alternatives, risk and recurrent recent financial crises, human factor has become increasingly important in investor decision-making. Studies on investment behavior of a number of authors at different times and places, encouraged this new widely accepted inter-disciplinary field of finance: Behavioral Finance. In order to understand and explain individual decision making and investment behavior, it is necessary to study behavioral factors which impact it. Various scholars have studied factors of financial behavior and their impact on financial decision making, and in particular a special focus has been given to psychological biases. Usually investors are not aware of their behavioral biases. If investors become conscious of biases they can face, they can act more rationally. This way of thinking might increase the quality of their decision-making. The paper aims to help decision-makers and investors get to know with psychological biases, in order to make better decisions when investing, reducing the chances of being vulnerable to behavioral deviations, as the consequences of individual errors are inevitably reflected at a macro level, causing instability and economic - financial crisis.

Keywords: financial behavior; investor; psychological biases; decision - making. (search for similar items in EconPapers)
Date: 2021
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://brucol.be/index.php/ejmn/article/view/5038 (text/html)
https://brucol.be/files/articles/ejmn_v4_i1_21/Dervishaj.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eur:ejmnjr:31

DOI: 10.26417/ejnm.v1i2.p25-35

Access Statistics for this article

More articles in European Journal of Natural Scinces and Medicine Articles from Revistia Research and Publishing
Bibliographic data for series maintained by Revistia Research and Publishing ().