Research On Third-Party Expert Review On The Impact Individual Investment Decisions

Third-Party Review on the impact consumer purchasing decisions has long been confirmed by academics for a long time, and most studies investigated online reviews and words of different environments mouth influence that focus on consumer purchase in purchasing decisions from the psychology perspective. But few studies pay attention to the impact of third-party comments on individual investment decisions, especially if there are any effect differences on individual decision between positive third-party reviews and negative third-party reviews effect. According to the conclusions of prospect theory, investors are more earnings sensitive the loss compared to earnings. This paper explores how the third-party expert to review the impact on personal investment decisions, where positive comments (raised rating) of third-party experts and negative third-party reviews (downgrades) affect individual investment decisions submitting to the conclusions of prospect theory. Furthermore, this thesis verifies whether there are differences under different economic situation.Firstly, the thesis studies the researches of finishing the theory, third-party review and factors affecting investment decisions; Secondly, by the basis of reviewing the related literatures two hypotheses were put forward; Thirdly, building specific models based on event analysis, and, verifying this assumption to help investors to make investment decisions with real data. Specific conducted two studies:Study 1, on using event analysis method to build specific models, the event point is that securities analysts recommended stocks report release date, and the event period of three months, this dissertation uses the data of the periods of 2008 to 2009, and calculates the excess stock return samples to verify the personal investment decisions that individual investors are more sensitive on the negative third-party review than positive third-party reviews.Study 2, firstly, according to a turning point in the confirmation process BB, the thesis determines the trend of China’s economy, and screens in line with the economic situation and the economic downturn situation uplink year. The same as study 1, this part uses event analysis and calculates stock excess returns to in the economic situation and the economic downturn situation to verify that compared to the economic situation in the upstream the economic downturn situation, more significant conclusions in accordance with prospect theory.The following is the conclusion:(1) Compared to positive third-party expert review, negative third-party expert reviews more impacts on individual investors; namely individual investors is more sensitive to the negative third-party expert review. (2) The economic situation result of study 1, being compared to the pessimistic economic situation, is more remarkable in optimism. According to the conclusions of context effects, people’s risk appetite will be affected by the decision in which the risk situation (frame) effects. In positive situations, they tend to risk aversion, while they tend to risk adventure in negative situations. Pessimistic economic situation belongs to the negative situation and individual investors are willing to take risks for there will exist "gamblers mentality".The present study mainly explores that positive and negative third-party expert review impact on individual investment decisions in different situations by the securities analysts recommended adjusted comment stocks. At present, the third-party expert review has penetrated into many industries. Therefore, the study results have a reference to third-party expert review of other research areas.