Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors
The paper examines the direct and indirect effects (via investors’ risk perception) of heuristic biases on investors’ irrational behavior in decision-making. The study also investigates the moderating effect of investors’ extraversion on both the direct and the indirect associations between heuristi...
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doaj-801c2b27b23f4e58a98c19bb137157e52020-11-25T03:59:16ZengFrontiers Media S.A.Frontiers in Psychology1664-10782020-10-011110.3389/fpsyg.2020.556506556506Cognitive Bias and the Extraversion Personality Shaping the Behavior of InvestorsMuhammad Ishfaq0Muhammad Ishfaq1Mian Sajid Nazir2Muhammad Ali Jibran Qamar3Muhammad Usman4Department of Management Sciences, COMSATS University Islamabad, Lahore Campus, Lahore, PakistanDepartment of Management Sciences, Riphah International University, Faisalabad Campus, Faisalabad, PakistanDepartment of Management Sciences, COMSATS University Islamabad, Lahore Campus, Lahore, PakistanDepartment of Management Sciences, COMSATS University Islamabad, Lahore Campus, Lahore, PakistanDepartment of Management Sciences, COMSATS University Islamabad, Lahore Campus, Lahore, PakistanThe paper examines the direct and indirect effects (via investors’ risk perception) of heuristic biases on investors’ irrational behavior in decision-making. The study also investigates the moderating effect of investors’ extraversion on both the direct and the indirect associations between heuristic biases and irrational decision-making. Based on survey data collected from 247 investors registered in various brokerage houses in Pakistan and the analyses (mediation and moderation) performed using the Process Macro technique (proposed by Hayes, 2017) in SPSS, the results of this study reveal that heuristic biases positively affect investors’ irrational decision-making both directly and indirectly via risk perception. The results reveal that extraversion moderates both direct and indirect associations between heuristic biases and investors’ irrational behavior in decision-making. Our findings carry useful practical implications for organizations’ policymakers.https://www.frontiersin.org/article/10.3389/fpsyg.2020.556506/fullcognitive biasesinvestor behaviorpersonality traitsdecision makingrisk perception |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Muhammad Ishfaq Muhammad Ishfaq Mian Sajid Nazir Muhammad Ali Jibran Qamar Muhammad Usman |
spellingShingle |
Muhammad Ishfaq Muhammad Ishfaq Mian Sajid Nazir Muhammad Ali Jibran Qamar Muhammad Usman Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors Frontiers in Psychology cognitive biases investor behavior personality traits decision making risk perception |
author_facet |
Muhammad Ishfaq Muhammad Ishfaq Mian Sajid Nazir Muhammad Ali Jibran Qamar Muhammad Usman |
author_sort |
Muhammad Ishfaq |
title |
Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors |
title_short |
Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors |
title_full |
Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors |
title_fullStr |
Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors |
title_full_unstemmed |
Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors |
title_sort |
cognitive bias and the extraversion personality shaping the behavior of investors |
publisher |
Frontiers Media S.A. |
series |
Frontiers in Psychology |
issn |
1664-1078 |
publishDate |
2020-10-01 |
description |
The paper examines the direct and indirect effects (via investors’ risk perception) of heuristic biases on investors’ irrational behavior in decision-making. The study also investigates the moderating effect of investors’ extraversion on both the direct and the indirect associations between heuristic biases and irrational decision-making. Based on survey data collected from 247 investors registered in various brokerage houses in Pakistan and the analyses (mediation and moderation) performed using the Process Macro technique (proposed by Hayes, 2017) in SPSS, the results of this study reveal that heuristic biases positively affect investors’ irrational decision-making both directly and indirectly via risk perception. The results reveal that extraversion moderates both direct and indirect associations between heuristic biases and investors’ irrational behavior in decision-making. Our findings carry useful practical implications for organizations’ policymakers. |
topic |
cognitive biases investor behavior personality traits decision making risk perception |
url |
https://www.frontiersin.org/article/10.3389/fpsyg.2020.556506/full |
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AT muhammadishfaq cognitivebiasandtheextraversionpersonalityshapingthebehaviorofinvestors AT muhammadishfaq cognitivebiasandtheextraversionpersonalityshapingthebehaviorofinvestors AT miansajidnazir cognitivebiasandtheextraversionpersonalityshapingthebehaviorofinvestors AT muhammadalijibranqamar cognitivebiasandtheextraversionpersonalityshapingthebehaviorofinvestors AT muhammadusman cognitivebiasandtheextraversionpersonalityshapingthebehaviorofinvestors |
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