Identification and Prioritization of Dominant Behavioral Biases in Tehran Stock Exchange

Pashootanizadeh, Hooman; Khamehchi, Hamed

doi:10.22034/bs.2022.254019

Identification and Prioritization of Dominant Behavioral Biases in Tehran Stock Exchange

Document Type : research

Authors

Hooman Pashootanizadeh ¹

Hamed Khamehchi ²

¹ Ph.D. in Systems Management, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.

² PhD of Management/ Faculty of Management, Kharazmi University, Tehran, Iran

10.22034/bs.2022.254019

Abstract

Identifying and prioritizing the dominant behavioral bias in the capital market makes it possible for investors and economic activists, with knowledge about them, to take appropriate measures to deal with the potential effects of these biases which disturbs the decision-making process. In order to overcome this, the present research has focused on prioritizing behavioral biases that affecting on investors decision making process in Tehran Stock Exchange. In the present study, in order to overcome the main objective of the research, in the first step of research, behavioral biases in this area were identified by reviewing the research literature and then, with the consensus of experts and investors who works in the capital market, 44 biases were identified for Tehran Stock Exchange and categorized into five groups like anomalous phenomena, cognitive, perceptual, intuitive and emotional. In the end, priority of behavioral biases in the Tehran Stock Exchange was investigated through Fuzzy-Analytic Network Process by using the extracted data from completed questionnaires by investors and investors of the capital market. The findings of the research indicate that the pleasure principle, illusion of control and self-control biases, with weights of 0.02983, 0.01654 and 0.0559, are three biases which have a higher priority than others. The result of this research shown that the pleasure principle bias in the emotional group and Home bias in the cognitive group, has the highest and lowest level of priority among the investors who works on the capital market.

Keywords

Behavioral Biases / Capital Market / Fuzzy Analytic Network Process

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