Do investors suffer behavioral biases when deciding?

Trpí investoři při svém rozhodování behaviorálními předsudky?

Jitka Veselá and Lucie Neubauerová

Český finanční a účetní časopis, 2016, vol. 2016, issue 3, 73-87

Abstract: The concept of individual rationality had been crucial in financial theory. The proponents of behavioral finance argue that investors act irrationally, resulting in financial market distortions, which are not spontaneously corrected. This paper focuses on behavioral biases representing and describing the violation of fundamental axioms of rationality in the investor behavior. Using a questionnaire survey, this article examines the investor's six most common behavioral biases, their impact on the individual decision-making process and in the end formulates recommendations to eliminate their influence.

Keywords: Behavioral finance; Prospect Theory; Behavioral biases; Behaviorální finance; Prospect teorie; Behaviorální předsudky (search for similar items in EconPapers)
JEL-codes: G02 G11 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.18267/j.cfuc.481

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