Investment Decision Making Among Gulf Investors: Behavioural Finance Perspective

Authors

  • Bashar Yaser Almansour Finance and Economics Department, Taibah University, Medina, Saudi Arabia
  • Yaser Ahmad Arabyat Finance and Economics Department, Al-Balqa' Applied University, Al-Salt, Jordan

DOI:

https://doi.org/10.32890/ijms2017.24.1.3

Keywords:

Behavioural finance, Herding, Heuristics, Prospect, Market, Self-attribution bias, Familiarity bias

Abstract

The rationality hypothesis has been a very popular topic among the academics. Being a widely accepted hypothesis as part of the traditional finance theories, an investor is deemed a rational agent and makes rational decisions by exhausting all available alternatives. However, recently, new behavioural finance theories have been gaining ground as many empirical findings, which have been left unanswered by the traditional theories, can be explained by these behavioural-approach based theories. This research examined the impact of psychological factors on risk-taking behaviour in investment decisions. In particular, this research considered the possible effects of psychological factors, namely herding, heuristics, prospect, market, self-attribution bias, and familiarity bias, in making investment decisions. The findings in this paper declared that risk-taking behaviour in investment is affected by herding factors, heuristics factors, prospect factors, market factors and self-attribution bias factors. The familiarity bias factors do not significantly affect risk-taking behaviour in financial investment.

Keywords: Behavioural finance, Herding, Heuristics, Prospect, Market, Self-attribution bias, Familiarity bias

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Published

27-07-2017

Issue

Vol. 24 No. 1 (2017): International Journal of Management Studies (IJMS) Vol. 24, No. 1 June 2017

Section

Articles

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Harvested 2026-09-16
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Identifiers DOI 10.32890/ijms2017.24.1.3