Representation Bias, Return Forecast, and Portfolio Selection in the Stock Market of China

Zhao, Daping; Fang, Yong

doi:10.1155/2014/686201

Cited by 2 publications

(4 citation statements)

References 16 publications

(21 reference statements)

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“…Representation bias is a cognitive tendency for investors to be able to influence their behavior on the stock market (Zhao & Fang, 2014). The representation bias in this case is a cognitive bias where people can relate to their analogs and can predict the future of analogs, especially in the horizontal representation bias (Zhang, 2008).…”

Section: Representation Biasmentioning

confidence: 99%

“…The representation bias in this case is a cognitive bias where people can relate to their analogs and can predict the future of analogs, especially in the horizontal representation bias (Zhang, 2008). In the literature on financial behavior, this bias has an impact on the quality of investment (Zhao & Fang, 2014). Investors often position past returns as a representation of the potential for future returns, therefore it is found that there is a trend of the future in terms of returns (Bondt, 1998).…”

Section: Representation Biasmentioning

confidence: 99%

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Financial Behavior during COVID-19: Cognitive Errors That Can Define Financial Future

Putri¹,

Xu²,

Akwetteh³

2020

JSS

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Purpose: The purpose of this study is to determine the economic effects caused by the crisis impact of the COVID-19 pandemic. Methodology: We explored various kinds of literature from various journals to find out the level of trust and financial behavior of the public during the COVID-19 pandemic. Results and findings: The phenomena that occurred during the crisis due to the COVID-19 pandemic, such as excessive volatility and the confidence of unaffected financial institutions, cannot be explained through the traditional market paradigm. In this paper, we explore this phenomenon from a behavioral finance perspective and discuss some relevant cognitive errors and biases during and after the crisis due to the COVID-19 pandemic. Limitation:The study explains by exploring the phenomenon from the viewpoint of financial behavior and discussing some of the relevant cognitive errors during and after the crisis. We only look at each phenomenon from a psychological point of view and consider its relevance to financial institutions and markets as well as the financial crisis due to the COVID-19 Pandemic.

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Section: Representation Biasmentioning

confidence: 99%

Section: Representation Biasmentioning

confidence: 99%

Financial Behavior during COVID-19: Cognitive Errors That Can Define Financial Future

Putri¹,

Xu²,

Akwetteh³

2020

JSS

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“…There are many studies in the literature that use the portfolio selection process and the fuzzy logic approach [2][3][4][5][6]. Xu et al proposed a new fuzzy model for portfolio selection problem.…”

Section: Introductionmentioning

confidence: 99%

“…j; k = 1; :::; n)(2) subject to a kj 2 [l kj ; u kj ]; 8j > k; a jk = 1 a kj ; 8j < k; a jj = 1 and similarly, S ui can be evaluated using the crisp mathematical programming model, j; k = 1; :::; n)…”

mentioning

confidence: 99%

Decision making for portfolio selection by fuzzy multi criteria linear programming

Akbaş¹,

Dalkılıç²

2019

Communications Faculty of Science University of Ankara Series A1Mathematics and Statistics

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In daily life events, there are many complexities arising from lack of information and uncertainty. Fuzzy linear programming approach has been developed to reduce or eliminate this complexity. This approach is the process of choosing the optimum solution from among the decision alternatives to achieve a speci…c purpose in cases where the information is not certain. One of the …elds where uncertainty or the lack of information makes it di¢ cult to decide is …nancial markets. Investors who have a certain amount of accumulations aim to increase in various ways as well as protecting the value of their income. While doing this, investors face the challenge of deciding to what extent they should invest in which investment instrument. Therefore, investors use fuzzy linear programming approach to eliminate this uncertainty and to create the optimal portfolio. In the proposed methods for the portfolio selection process in the literature, the weights of the criteria are calculated by using triangular fuzzy numbers. In this study, as an alternative to the Enea and Piazza's portfolio selection model, which uses the triangular fuzzy numbers for criteria weighting, a new model that uses the trapezoidal fuzzy numbers for the same aim was proposed. With the solution of the linear programming model which is based on the determined weights, an alternative solution has been produced to the problem of which investment instrument will be invested at what proportion. The results regarding to the proposed and the existing method in the literature were compared.

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Representation Bias, Return Forecast, and Portfolio Selection in the Stock Market of China

Cited by 2 publications

References 16 publications

Financial Behavior during COVID-19: Cognitive Errors That Can Define Financial Future

Financial Behavior during COVID-19: Cognitive Errors That Can Define Financial Future

Decision making for portfolio selection by fuzzy multi criteria linear programming

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