Does the Investor’s Trading Experience Reduce Susceptibility to Heuristic-Driven Biases? The Moderating Role of Personality Traits

Neenu Chalissery, Mosab I. Tabash (), T. Mohamed Nishad, Ibtehal M. Aburezeq and Linda Nalini Daniel
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Neenu Chalissery: Research Department of Commerce and Management Studies, Farook College (Autonomous), Kozhikode 673 632, Kerala, India
Mosab I. Tabash: College of Business, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates
T. Mohamed Nishad: Research Department of Commerce and Management Studies, Farook College (Autonomous), Kozhikode 673 632, Kerala, India
Ibtehal M. Aburezeq: College of Education, Humanities and Social Sciences, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates
Linda Nalini Daniel: Business Department, Higher Colleges of Technology, Abu Dhabi P.O. Box 41012, United Arab Emirates

JRFM, 2023, vol. 16, issue 7, 1-21

Abstract: The aim of this study was to evaluate whether trading experience reduces exposure to heuristic-driven biases, namely availability bias, anchoring and adjustments bias, representativeness bias, and confirmation biases of individual investors operating in the Indian stock market, through the moderating role of the Big Five personality traits. To achieve these research objectives, primary data were collected through a structured questionnaire. The sample consisted of 408 individual investors trading on the Indian stock market, who were selected on a convenient basis. Confirmatory factor analysis and Cronbach’s alpha were used to measure the validity and reliability of the data. Further analysis was conducted using Pearson’s correlation and multiple regression. The results of this study prove that increased trading experience does not always reduce the susceptibility to heuristic biases. Increased trading experience reduces the susceptibility to availability, and anchoring and adjustment heuristics of individual investors operating on the Indian stock market. The present study has some relevant implications for investors, portfolio managers, financial advisors, and other interested persons in the stock market.

Keywords: investor experience; availability bias; anchoring and adjustments bias; representativeness bias; confirmation bias; big five personality traits (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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