Investigating self-efficacy and behavioural bias on investment decisions

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dc.contributor.authorSrinivasan, Kuppusamy
dc.contributor.authorKarthikeyan, Parthasarathy
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2023-12-04T11:47:24Z
dc.date.available2023-12-04T11:47:24Z
dc.description.abstractThe determinants of irrational decisions on the stock market are found in numerous empirical studies. However, self-efficacy and behavioural biases have a sturdy influence on stock market investment decisions. Behavioural biases are formed with heuristics, prospect theory and herding effect concerning stock market investments. Self-efficacy is independent of behavioural biases but is closely connected with controlling behavioural intentions in decision-making. The research was conducted to find the influence of self-efficacy and behavioural biases in the decision of stock market investment. The study was conducted with 250 individual investors and applied the SEM technique. Findings indicated that heuristics had a positive relationship with behavioural biases, but behavioural biases reported a negative relationship with the herding effect and prospect theory. Heuristics were mostly developed on the intrinsic strength of individual investors; therefore, investors believe heuristics will be a better decision-making tool than prospect theory or the herding effect. Prospect theory is shaped and influenced by regret aversion, loss aversion, self-control and mental accounting. Financial literacy, risk tolerance, and peer support profoundly develop the self-efficacy of investors to make profitable investment decisions. Self-efficacy is formed by risk tolerance, financial literacy and peer support in the stock market investment decision and identified the evidence of individual investors not making rational decisions and facing one or more behavioural biases and self-efficacy factors. The study finds the combined effect of behavioural biases and self-efficacy in stock market investment decisions, which have significant implications among individual investors, particularly in emerging markets.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2023-4-008
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.urihttps://dspace.tul.cz/handle/15240/174250
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectHeuristicsen
dc.subjectprospect theoryen
dc.subjectherding effecten
dc.subjectself-efficacyen
dc.subjectindividual investorsen
dc.subjectstock marketen
dc.subjectinvestment decisionsen
dc.subject.classificationG11
dc.subject.classificationG40
dc.subject.classificationG41
dc.titleInvestigating self-efficacy and behavioural bias on investment decisionsen
dc.typeArticleen
local.accessopen
local.citation.epage133
local.citation.spage119
local.facultyFaculty of Economics
local.filenameEM_4_2023_8
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue4
local.relation.volume26
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