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Stephen
DNA analysis and financial behavior
Adil, M., Singh, Y., & Ansari, M. S. (2022). How financial literacy moderate the association between behavior biases and investment decisions? Asian Journal of Accounting Research, 7(1), 17-30. https://doi.org/10.1108/AJAR-09-2020-0086
Gupta, S., & Shrivastava, M. (2022). Herding and loss aversion in stock markets: mediating role of fear of missing out (FOMO) in retail investors. International Journal of Emerging Markets, 17(7), 1720-1737. https://emerald.com/insight/1746-8809.htm
Kumari, A., Goyal, R., & Kumar, S. (2022). Review on Behavioral Factors and Individual Investors Psychology Towards Investment Decision Making. ECS Transactions, 107(1), 8009. https://doi.org/10.1149/10701.8009ecst
Mittal, S. K. (2022). Behavior biases and investment decision: theoretical and research framework. Qualitative Research in Financial Markets, 14(2), 213-228.
Kolawole
Introduction
Behavioral finance is a multidisciplinary discipline that integrates concepts from psychology, economics, and finance to better understand how individual and group behavior impact financial markets and decision-making processes. The five journal articles offer a variety of viewpoints on behavioral finance in distinct circumstances. Wadhawan and Kulkarni (2022) assess the impact of COVID-19 on behavioral finance, emphasizing how the epidemic affects investor behavior. Ballis and Verousis (2022) investigate the link between behavioral biases and cryptocurrencies, concentrating on the psychological elements of cryptocurrency trading. Verlaine (2022) analyzes the impact of behavioral finance on the architecture of the asset management business, highlighting the importance of investor behavior in influencing the sector's structure. Yasmin and Ferdaous (2023) use a behavioral finance method to explain investor behavior in a given market environment to examine the behavioral biases influencing investment decisions of capital market investors in Bangladesh. Finally, Goel and Rastogi (2023) investigate the influence of borrowers' behavioral and psychological qualities on credit default, presenting a conceptual model that incorporates behavioral aspects into credit risk assessment. These articles highlight the broad applicability of behavioral finance across several areas, giving insights into how psychological biases and behavior impact financial decision-making processes and outcomes. The forum is arranged around the basic issue of behavioral finance, encompassing a wide range of themes such as the influence of external events (e.g., COVID-19), specific financial instruments (e.g., cryptocurrencies), industry structure, and human decision-making in various financial circumstances.
Current Trends
Analysis from five separate studies on behavioral finance reveals some similar themes and contemporary developments in the subject. For starters, there is a common emphasis on the influence of behavioral biases and psychological factors on financial decision-making. Wadhawan and Kulkarni (2022) explain how the COVID-19 pandemic affects investor behavior, indicating the existence of fear and herd mentality as significant behavioral drivers. Similarly, Yasmin and Ferdaous (2023) uncover significant cognitive biases impacting investing decisions in Bangladesh's capital market. Both studies emphasize the importance of psychological variables in affecting investing decisions. Second, the articles discuss the role of behavioral finance in various situations. Ballis and Verousis (2022) investigate the behavioral elements of bitcoin trading, discovering herding tendency and overconfidence among cryptocurrency investors. This is consistent with Wadhawan and Kulkarni's (2022) findings, which indicate that behavioral biases endure throughout financial markets. Furthermore, Verlaine (2022) investigates the influence of behavioral finance on the asset management sector, emphasizing how investor behavior impacts the architecture of the company. This viewpoint emphasizes the importance of behavioral finance beyond human decision-making, extending its effect on financial institution structure. Third, there is a rising awareness of the need of incorporating behavioral aspects into standard financial models. To measure loan default risk, Goel and Rastogi (2023) present a conceptual model that integrates borrowers' behavioral and psychological features. This integration recognizes that behavioral characteristics, in addition to traditional financial indicators, play an important role in credit risk assessment. In contrast to the previous works, Goel and Rastogi (2023) investigate borrowers' behavioral features as predictors of loan default. This demonstrates the widening scope of behavioral finance to include both investors and borrowers in understanding financial outcomes. Overall, the articles discuss many elements of behavior, from investor decision-making to credit risk assessment, and while they all agree on the importance of behavioral finance in explaining financial behavior, they provide differing viewpoints. These results add to an in-depth comprehension of behavioral finance and its effects on financial markets, institutions, and decision-makers.
Future Research
The results of the five publications point to a number of intriguing topics for behavioral finance study in the future. First off, further research into how external factors—like pandemics or economic crises—affect investor behavior will help us better understand how emotions and heuristics affect financial decision-making in uncertain times (Wadhawan & Kulkarni, 2022). As noted in the study on the capital market of Bangladesh (Yasmin & Ferdaous, 2023), further research is required to examine the impact of cultural and socioeconomic variables in producing behavioral biases and their implications on financial results. The development and evaluation of interventions and techniques to lessen the influence of behavioral biases on financial decision-making, both at the individual and institutional levels, might also be the subject of future study. Last but not least, additional study is necessary to comprehend the behavioral characteristics unique to this asset class, particularly the impact of sentiment and social media on cryptocurrency pricing and investor behavior (Ballis & Verousis, 2022). Scholars may develop behavioral finance theory and its useful applications in the financial industry by filling in these research gaps.
References
Ballis, A., & Verousis, T. (2022). Behavioral finance and cryptocurrencies. Review of Behavioral Finance, 14(4), 545-562.
Goel, A., & Rastogi, S. (2023). Understanding the impact of borrowers' behavioral and psychological traits on credit default: Review and conceptual model. Review of Behavioral Finance, 15(2), 205-223.
Verlaine, M. (2022). Behavioral finance and the architecture of the asset management industry. Journal of Economic Surveys, 36(5), 1454-1476.
Wadhawan, A., & Kulkarni, M. S. (2022). Behavioral finance and COVID-19. Cardiometry, (23), 236-243.
Yasmin, F., & Ferdaous, J. (2023). Behavioral biases affecting investment decisions of capital market investors in Bangladesh: A behavioral finance approach. International Journal of Managerial Finance, 20(2), 232-250.
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