An Investigation of the Affect Heuristic in the Brazilian Stock Market

Ricardo Alonso Gonzalez and Adriano Leal Bruni
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Ricardo Alonso Gonzalez: UFBA/NPGA Business School, Federal University of Bahia, Bahia, Brazil
Adriano Leal Bruni: UFBA/NPGA Business School, Federal University of Bahia, Bahia, Brazil

International Journal of Applied Behavioral Economics (IJABE), 2015, vol. 4, issue 1, 20-41

Abstract: It is considered that decisions are influenced, even in part, by aspects of affect. It is agreed with that studies that suggest the action of the affect heuristic, which can influence the perception of risks and benefits, even in environments where rationality should be more prominent, such as in the financial market. This paper investigates how risks and benefits are perceived by Brazilian stock market investors. Additionally, it investigates whether these aspects could be explained by gender, age or perceived knowledge about the market. The analysis makes use of the t-test, logistic regression and factor analysis and is applied to a sample consisting of 143 investors. The results confirm the existence of the affect heuristic and a negative association between perceived knowledge of the market and the affect heuristic.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jabe00:v:4:y:2015:i:1:p:20-41

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