The Intrinsic Mechanism And Features Research Of Conformity Behavior Of Chinese Stocks' Investors

In recent years, technology changes quickly,andthe stock market is showing virtualization and complication tendency.With the rise of the subject about Behavioral Finance,it is said that investors' psychological factors and behavioral characteristics are important reasons of the stock market's complex characteristics.In Chinese stock market,investors' conformity behavior is common phenomenon in market.Conformity behavior is used by animals firstly,referring to animals' (cattle, sheep, etc) behaviour phenomenon of moving and foraging together.Then this concept is extended to describe human social phenomenon,referring to individuals' thoughts, feelings, and actions which are the same as the most human beings'.Conformity behavior in financial activities refers to that in an uncertain circumstances,investors imitate others' decision,or excessively dependent on public opinion regardless of their own information.Investors' conformity behavior has great influence on the efficiency,intellect and stability of the market,so the research on irrational investment behavior and conformity behavior becomes a new hotspot in the finance field.This paper takes the Chinese stock market as the research object which is typical between the emerging markets in developing countries.From the perspective of the cross-sectional absolute deviation of returns,it analises the investors' conformity behavior characteristics in the stock market.This paper is divided into four parts:The first part is introduction, mainly about the research background and significance,and explains the research status both at home and abroad,then it points to the innovation and the insufficiency of this paper;The second part introduces theories on conformity behavior,such as its concept, characteristics, classification, reasons and market effects;The third part puts forward psychological mechanism of investors' conformity behavior named cognitive reflection model in the stock market, meanwhile it takes advantages of empirical evidence to explain the features of investors' conformity behavior;The fourth part proposes some enlightenment and feasible suggestions for Chinaese situation,there are three theory enlightenment:First, it needs the theory which uses quantitative analysis method to discover various factors palying the role of conformity;Second, a large number of national scholars think that national macro policies have great influence on the stock market,but fail to resolve how to put this factor joined to the model;Third,when the domestic scholars reserach the conformity, on the one hand, they should be in reference to the foreign models,and also modify and improve the models according to the chinese stock market.There are seven policy suggestions,First,to improve the system of information disclosure;Second,to perfect the internal operation mechanism of institutional investors;Third, to strengthen investors' education and improve their qualities;Fourth, to make the government keep the identity of regulator,advance the efficiency of macro-control,avoid excessively intervene securities market;Fifth,timely to introduce short system;Sixth,to improve the qualities of listed companies;Seventh,to improve the investment structure and diversify the institutional investors.