Do heuristics affect Brazilian investors’ decision-making process?

Virgílio Vasconcelos Souza, Lucas Lopes Ferreira Souza, Oderlene Oliveira, Elnivan Moreira de Souza and Juliana Silva Costa

Review of Behavioral Finance, 2023, vol. 16, issue 2, 282-299

Abstract: Purpose - The purpose of this research is to analyze the influence of heuristics on Brazilian investors' behavior in the decision-making process. Design/methodology/approach - The authors apply the partial least squares structural equation modeling methodology. This sample is composed of 220 investors. Findings - The heuristics of overconfidence and anchoring positively influence investors' decision-making, while loss aversion negatively influences it. The herd effect exhibits no influence. The results also support the idea that decision-making positively influences investors' performance. Investors feel secure in their attitudes regarding financial decision-making, even if their decisions are not always rational as they are affected by biases. Originality/value - This article explains the influence of heuristics on investors' decision-making and performance in the Brazilian context during the COVID-19 pandemic.

Keywords: Investment decision-making; Behavioral finance; Heuristics; Overconfidence; Anchoring; Loss aversion (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rbfpps:rbf-09-2022-0210

DOI: 10.1108/RBF-09-2022-0210

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