Psychological profile and investment decisions

Emanuele Bajo, Marco Cecchini and Barry Oliver

Finance Research Letters, 2023, vol. 58, issue PA

Abstract: We conduct a study to test whether psychological factors influence stock trading behavior in a sample of 176 individuals. Using a trading simulation game, we combined financial data with demographic information, psychological traits, and risk attitudes. Our findings indicate that conscientiousness is a significant factor in explaining higher trading volume and greater risk-taking. Furthermore, demographics and risk attitude measures influenced individual investment choices. These results demonstrate that financial decision-making and the frequency of stock trading are influenced not only by our attitudes toward risk but also by our level of conscientiousness. These findings have important implications for modeling decisions under risk and providing financial advice.

Keywords: Financial trading; Investment style; Personality traits; Risk attitude (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006177

DOI: 10.1016/j.frl.2023.104245

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