Emotional and Psychological Factors Affecting Students’ Investment Behaviors: A Research on Giresun University Faculty of Economics and Administrative Sciences Departments of Business Administration’ Students


The economic and financial theories that are developed to conceptualize financial decisions and financial markets are based on the definition of rational economic behavior that focuses on utility maximization. The classical finance approach implies that investor behaves rationally in the efficient markets and it does imply any transaction cost. A fundamental economic assumption ‘‘homo economicus’’ definition is in fact that does not reflect human nature and human behavior. Anomalies in the financial markets have led to the questioning of theories in economics and finance literature. In this context behavioral finance responds to classical finance paradigms with the maximization of investor satisfaction level. Behavioral finance tries to explain decision making under uncertainty with the help of psychology, sociology and anthropology. In real life, investors are influenced by emotional, psychological, and sociological factors when making their decisions. For this reason, behavioral finance has become an attractive topic in the last thirty years. In this study, the emotional and psychological factors influencing students of the Giresun University FEAS department of business administration when investing were examined. Within the scope of the study, it was determined that there are four important factors affecting students' investment decisions by performing factor analysis. According to factor analysis, there are four important factors that affect students' investment decisions. The first factor affecting students’ investment decisions is their “personality traits’’. The second factor affecting individual investment decisions is “the person’s attitude toward risk’’. The third important factor for decision makers is “the relationship between investment instruments and social interaction’’. The last factor affecting students’ choice of investment was determined as is “the relationship between investment instruments and media’’.


Keywords


Behavioral Finance, Cognitive Biases, Investment Decisions, University Students

Author : Alper KARAVARDAR -Yeliz ŞAHİNTÜRK
Number of pages: 687-704
DOI: http://dx.doi.org/10.29228/TurkishStudies.40222
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Turkish Studies-Economics,Finance,Politics
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