Study On The Relationship Between The Psychological Bias And Investment Behavior

This thesis has studied the relationship between demographic characteristics and psychological biases and also explored the correlation between psychological biases and investment behaviors by conducting a survey. The results showed that there were disposition effects in Chinese investors and over more than 2/3 of the investors have other psychological biases which including mental accounting and regret aversion, while more than 1/3 of the investors would be overconfidence to their investment. It also could get that, according the empirical results, female investors would tend to be more disposition effect and regret averse than males; and the older investors inclined to keep losses and follow the recommendations as well as the low income investors. Those who were the major economic source of household would prefer to sale their assets when which were profit, but would not choose to continue to buy when they were at loss. In addition, the effect of investment quota to psychological biases mainly was reflected on the mental accounting, while kinds of investment was on stop-loss point settlement, which was as same as the time as an investment in finance markets. Furthermore, the findings demonstrated that the disposition effect and regret aversion would be harmful to the performance, contract to mental accounting and overconfidence which did not have a significant effect to performance. At last, it indicated that, from the logistic model, the setting stop-loss point played an important role to reduce the disposition effect, while the regret aversion exact a positive impact on it as well as the recommendations from the external information such as professional websites and specialists. And those who were overconfidence would be more tendencies of disposition effect when they were at a loss.