The Psychological Decision Process Of Investor Based On Personality And The Research On Double Utility

The security market is a place of securities business for investors, has a function of rational distribution of resource, with a very strong characteristic of speculativeness at the same time. If it is a pure outlet for investment, then it will be effectual. And if leading composition is speculation, the market may thus be non- effectual. Whether the market is effective have always been hotspot of disputing and studying for the academia and the practice circle. Behavior finance has proved ineffectiveness side of the market with a large number of convincing examples based on theoretical foundation of cognitive psychology, thus become the attention focus of the academia..Whether the market is effective mainly mean whether the information is effective. If the information is effective, the price will reflect information fast and rationally. Fama (1970 ) had proposed three distinguishing levels of effective market according to the information classification related to the assets pricing by Roberts (1967 ): Weak-form effective market, semi-strong effective markets and strong effective markets . For this purpose, Fama provides an authoritative and rigorous definition of effective market. He thinks that an effective market should meet the equation as follows:Note: Where: p₁ = (P₁t, P₂t .... P_mt) for the vector of all security price during t period; φ_t-1 for allavailable information set during t-1 period; for the information actually used during t-1period;for the price probability density function during t period under for the actual price probability density function during t period underSo, in a valid market, all available information should have been utilized by the probability density function which determines the price during the t period in the future; On the contrary, while determining the price during the t period for an invalid market, some informationof information set have been neglected or wrong information havebeen used.Under such a background mentioned above, the thesis attempts to penetrate investors' psychological course of decision-making at a completely new visual angle based on the theoretical foundation of personality psychology. The author thinks that the personality structure is the cognitive filter and cognitive foundation of individual. Namely, in the face of the same information, the personality filter decides what cognitive conclusions would be like and what decision would be made. At this angle of view, investors can not be rational economic person of the same homogeneity, they all have "utility of non-wealth maximization" model of their own in fact. The "utility of non-wealth maximization" means the emotion maximization of their own, whose utility is concentratedly embodied in the pursuit of time. At this point, the thesis have clearly redefined the concepts of rationalness and irrationalness, investment and speculating, giving the concept of utility a new intension of "emotion" and not limited to the utility connotation of " materialization" of modern finance. On that basis, the thesis divides utility into investor's demand utility —Subjective utility, and investor's income utility and market supply utility —Objective utility, and has introduced the time variable —Time negative utility, as the important factor of investors' demand utility. The thesis has taken the limen concept of experimental psychology, and introduced various kinds of utility limen concepts , such as desperate...