Investor Behavior In The Chinese Stock Market System

China's stock market is the outcome of the reform of SOEs and financial system. It has become an important part of national economy. Investor is one of the most important principal parts in stock market.This paper is based on the model of interaction between institution and behavior. The author analyzes the interaction between the evolution of institution of China's stock market and investor's behavior by using the thinking of Behavioral Finance, new institutional economics and sociology.It is a fundamental presupposion to analysy human behavior that the behavior of human is sensible behavior on some restriction conditions which includes the scope of choices, information cost and the ablity to deal information. As system has an obviors effect on the scope of choices, information cost and the ablity to deal information, system is one of the important factors affecting the behavior of investors.The system of Chinese share market is different with that of mature market in many ways :( 1) the level of marketization of stock issue institutions is very low ;( 2) the level of open-up is limited and the scale of foreign investors is too small ;(3) the delisting rules is not wholesome;(4) short sales system is void;(5) the segmentation of stcok;(6) the direct control of government on stock market. But it is also found that the difference is lessening in recent years.The behavior of Chinese investors is similar with the investors of other courtries in many ways, but it has some special behavior modes which are the results of characteristic china stock market institutions :(1) the incompleteness of stock issue institutions and delisting rules leads to obviors characteristic of speculations;(2) in the trade of speculations, the quanlity of information and the ability of investors to deal with information are very important. Due to the segmentation of stcok and direct control of government on stock market, Chinese investors prefer all kindsof non-open informations. (3) The preference to non-open informations leads to herd behavior and the incompleteness of delisting rules and the segmentation of stcok lead to disposition effect. (4) Void of short sales system and smallness of the scale of foreign investors lead to the trade mode of keystone investorment becoming the mainstream mode in china stock market. (5) This kind of trade mode leads to the chararistics of china stock market.In total, the behavior characteristic of China stock market is consistent with the institutions characteristic of China stock market which is the outcome of execcess control of gvermnet on stock maket. So, for the development of China stock market, the government should retreat from the direct control and commit itself to the construction of institutions: (1) deepening the reformation of marketization ;( 2) cosummating the system of monitoring;(3)quicking the building up of legal system in capital market;(4)enhancing the building of cultrure in capital market...