Research On Bounded Rationality Behavior Of Securities Business Investors In China

The traditional financial economy supposes that the investor is rational and makes decision due to the maximum avail. However, the real performance in the securities business home and abroad show investors make decisions in bounded rationality. Since the immaturity of market development and the incomplete of the legal system, bounded rationality behavior appears to be active in China's securities business, namely, deposition effect, herding behavior, over-confidence, over-reaction and under-reaction. Aiming at those behavioral bias, there are many demonstrations of behavior finance. Considering the special situation in China's securities business, the reason for bounded rationality can be concluded as three aspects, such as cognitive bias investors born with, investing environment factors including choice for investing products, government police over-reflection and investor's knowledge and structure factors.Considering the real situation in China's securities business, this paper modifies CAMP. Based on"loss aversion"and"house money effect"in behavioral bias theory, this paper builds a new model on investor behavior using the theory of fuzzy mathematical to simplify CAMP. Through the studying on that model, the result shows that the goal of investor is not the max of avail but the max of his fulfillment, which leaves flexible space from maximum of income under rational hypothesis condition. Therefore, the main task is to correct the bounded rationality as possible to approach to the maximum of income. For China's securities business, it is essential to reduce the damage caused by bounded rationality. The solutions could be the improving the quality of investors, making the investment environment better and optimizing the structure of investors.