Research On The Influence Of Irrational Behavior On Personal Financial Investment Decision

Economic development has promoted the continuous increase of household income and savings.In this context,the residents' demands for personal financial asset management and rational allocation of consumption keep rising.In order to realize the diversification of household financial assets,the investment mode of urban residents in China has gradually transformed from the single bank deposit to the wealth management product investment that takes into account both liquidity and profitability,and household purchase demands for wealth management products are rising constantly.Financial products launched by commercial banks,the main financial institutions in China's financial market,have become one of the important investment products for Chinese residents.This means that commercial banks that mainly provide traditional services such as interest spreads of deposit and loan will also face a transformation.Providing high-quality bank financial products is a new opportunity for them.At the same time,in the trend of increasing demands for financial asset diversification,whether household investors can reasonably allocate financial assets to the greatest extent is not only related to the effective preservation and appreciation of their assets,but also affects the normal development of the financial market and the effective allocation of financial resources.That is to say,the existence of many irrational factors in the real world has resulted in too high investment risks,which will continue to increase the volatility of the financial market.Thus,it can be seen that the irrational behaviors in the personal financial investment decision-making of residents plays a very important role in the effective allocation of residents' investment income and financial resources and the stable development of the financial market.Therefore,the influence of irrational behaviors on the personal wealth management investment decision-making process and the factors that lead to its existence are worthy of in-depth exploration and research.This paper summarizes the relevant literature on the influence of irrationality on personal financial investment decision-making.Based on the relevant theories of life cycle and behavioral finance,this paper analyzes the mechanism of the influence of irrational behavior on personal financial investment decision-making.we collect 432 micro-data of residents who buy financial products of commercial banks by designing and distributing questionnaires.According to the irrational behavior of commercial banks in personal finance,irrational behaviors divided into external environment deviation and internal decision-making deviation.The decision-making process of personal financial investment has been set as pre-purchase stage,mid-purchase stage and post-purchase stage.The index measure of irrational behavior has been established to help to analyses the basic personal characteristics and various irrational factors of financial residents of commercial banks.Three regression models,Ordered Logistic,OLS and Binomial Logistic model,were used to analyze the impact of the basic characteristics of residents and irrational behaviors on personal financial investment decisions in the three stages of dynamic analysis.Further empirical analysis was carried out through OLS models to study the impact of irrational behavioral performance on investment duration of different income groups.Through empirical research,it is concluded that age,risk aversion degree,external financial environment and other factors significantly affect the personal wealth management investment decision-making behaviors at different stages and the investment duration of different income groups.Representativeness bias and anchoring and adjusting heuristic bias and availability bias have a significant impact on the pre-purchase decision-making.Overconfidence,loss aversion,emotional effect and other irrational factors during the purchase stage have a significant impact on decision-making.Contrast effect,dilution effect,sunk cost and other irrational behaviors have a significant impact the decision-making behaviors in the post-purchase stage.Overconfidence,loss aversion,and other irrational behaviors have a significant impact on different income groups.Finally,this paper proposes solutions to individuals,financial institutions and regulatory authorities,in order to provide valuable inspiration for financial regulators,residents and financial institutions...