What question did this study set out to answer?

This research examines how cognitive biases like overconfidence and the representative heuristic influence investor decision-making in the stock market.

April 1, 2020Borsa Istanbul ReviewOpen Access

Exploring market overreaction, investors’ sentiments and investment decisions in an emerging stock market

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Authors

SPShagufta ParveenUniversity of Salerno ZSZoya Wajid SattiShaheed Zulfiqar Ali Bhutto Institute of Science and Technology QSQazi Abdul SubhanBahria University

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Implication

Randomized trial reveals significant effects of cognitive biases on investment decisions in Pakistan's stock market, indicating investor behavior impacts trade volume.

Key Points

This research examines how cognitive biases like overconfidence and the representative heuristic influence investor decision-making in the stock market.
Primary data collected from 446 retail investors at the Pakistan Stock Exchange (PSX).
Secondary data sourced from 301 companies across 35 sectors listed on PSX.
Analysis focuses on the relationship between cognitive biases and investment behavior.
Overconfidence significantly affects investor decision-making.
The representative heuristic leads to higher overreactions to new market information.
Investment decisions are directly impacted by traders' cognitive biases, influencing overall trade volume.

Cite This Study

Parveen et al. (2020) studied this question.

synapsesocial.com/papers/6a0dd50d1e1a6dfdb4badc7e https://doi.org/10.1016/j.bir.2020.02.002

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Implication

Randomized trial reveals significant effects of cognitive biases on investment decisions in Pakistan's stock market, indicating investor behavior impacts trade volume.

Exploring market overreaction, investors’ sentiments and investment decisions in an emerging stock market

Discussion

Member takes

Implication

Key Points

Cite This Study

Exploring market overreaction, investors’ sentiments and investment decisions in an emerging stock market

Discussion

Member takes

Implication

Key Points

Cite This Study

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