| The rationality of investors of the Security Market determines the healthy, consistent and steady development of Chinese Security Market, so the research into it is not only necessary, but also urgent in reality. Above all, it is an important issue concerning the guiding theory of the development of Chinese Security Market. From the 1980s, modern finance theory on the premise condition of assumption of investor's rationality has difficulty in explaining anomalies. However, the theory of behavioral finance on the basis of psychology and sociology has shown great prospects. In face of irrational behaviors of investors in Chinese Security Market and the reality of inefficient market, it is necessary to study psychological problems of investors emerging in Chinese Security Market. Moreover, it determines which investment conception to be held by investors. After experiencing ten years' rises and falls, Chinese Security Market has entered a new stage. Those investment strategies such as following bankers, insider dealing will not be efficient. With China's accession into WTO and the gradual deepening of financial open to the whole world, Chinese Security Market will face unprecedented challenges. Under such severe circumstances, investors will have to find effective investment strategies as soon as possible.From macro-analysis, behavioral finance provides our political circles and supervisory circles with important theoretical basis of reasonably predicting security market and economic situations, and designing proper policies. Based on micro-analysis, understanding investors' psychology will not only avert decision-making mistakes, but also help to design specific investment strategies in response to other investors' cognitive biases. And therefore, both external competition pressures and internal development needs require further study on this problem. Because a lot of individual investors play a key role in Chinese Security Market, and due to an urgent need of theories to protect the interests of smaller investors, the thesis mainly studies the behaviors of individual investors.Modern finance theory that plays a dominant role in the current study on finance and security believes that security investors are rational, and that they make investment decisions in accordance with expected utility theory. However, many studies done by foreign scholars have found that an individual's emotions, characteristics and psychological feelings have a bearing on his financial investment, so an investor does not always make decisions in a rational way. His investing behaviors are not only influenced by his own cognitive biases, but also by external environment. In particular, because our security market was established under specific historic circumstances, its development inevitably has Chinese characteristics. So does a Chinese individual investor have similar cognitive biases? What are their forms? What are the influencing factors? Are there any rational factors in cognitive biases? The thesis attempts to answer these questions through psychological experiment on investors' behaviors and empirical verification of investors' transaction account data.The thesis illustrates the theory of behavioral finance on the basis of explanation of modern finance theory with efficient market theory at its core and of the challenges it faces. Within the framework, through psychological experiment on investors' behaviors and empirical verification of investors' transaction account data, the studies show that Chinese investors have various cognitive biases on their investing behaviors, such as anchoring, representativeness, saliency, and overconfidence. Some of these cognitive biases have been identified in foreign studies. Other cognitive biases bear Chinese characteristics. These cognitive biases usually lead to the tendency of overreactions of investing behaviors, and thus intensify instability of the Security Market to some extent.The thesis highlights integration of theory with practice. It em... |
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