International journal of Contemporary Business Studies

International Journal of Contemporary Business Studies
Vol: 3, No: 6. June, 2012 ISSN 2156-7506
Available online at http://www.akpinsight.webs.com
investors select options 3 or 4 so it is said that 53% investors are Cognitive Dissonance investors. They
are ready to change in investment pattern to support financial information that available in market. 61
investors select options 1 or 2 that mean 47% investors are non cognitive dissonance investors that means
they are stick to their past experience and investment (Conservatism).
N=130, x=69, p^=69/130=0.5307, p=.60, q=.40, = 7%, confidence level =93%
P^ p 0.5307
0.60
Z cal =
pq / n 0.60*0.40 /130
=
= -0.0693/0.0429 = -1.61
Z tab At = 7% from the normal table is = -1.48, Zcal Z tab
H 0 is accepted; it means 60% investors are Regret Investors.
CONCLUSION AND DISCUSSION
The paper tends to examine the Indian investors‟ behavior. Six main cognitive biases namely Rationality,
over confidence, Disposition Effect, Conservatism, Cognitive Dissonance and Regret Theory were used
to check the investors‟ behavior. The best manner to explore the investors‟ behavior is to interact directly
with the investors and try to extract their opinion. So, the questionnaire survey technique was adopted and
questions based on these psychological biases were asked. The responses collected through the
questionnaire were analyzed and hypothesized. The findings support the rationality, disposition effect and
theory of regret concepts of behavioral concept. But findings do not support the overconfident,
conservatism and cognitive dissonance concepts.
REFERENCES
Daniel Kahneman and Mark W. Riepe (1998). “Aspects of Investor Psychology.” Journal of Portfolio
Management, Vol. 24 No. 4, summer 1998.
Daniel K and Titman S (2000), “Market Efficiency in an Irrational World”, NBER, Working Paper 7489.
Edwards, W (1962) “Conservatism in human information processing” in: Kleimutz, B ed.: Representation
of human judgment (Jhon Wiley and Sons, New York, NY).
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