Trend following or reversal: Does culture affect predictions and trading behavior?

Rieger, Marc Oliver; Wang, Mei; Phan, Thuy Chung; Gong, Yujing

doi:10.1016/j.gfj.2022.100769

Cited by 3 publications

(4 citation statements)

References 53 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Thus, 489 investors were considered appropriate for CFA. The formative model assessment of OB was examined through SmartPLS 4.0.8.4 software (Rieger et al, 2022;Ringle et al, 2022) in variance-based partial least square path modeling (PLS-PM) (Dirsehan and Henseler, 2022) settings.…”

Section: Methodsmentioning

confidence: 99%

“…Thus, 489 investors were considered appropriate for CFA. The formative model assessment of OB was examined through SmartPLS 4.0.8.4 software (Rieger et al. , 2022; Ringle et al.…”

Section: Methodsmentioning

confidence: 99%

“…Recent studies also corroborated the fact that behavioral biases can be influenced by self-enhancement in investors. Thus, financially literate investors were also influenced by behavioral biases (Rieger et al. , 2022a; Iram et al.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Specifying and validating overconfidence bias among retail investors: a formative index

Nair,

Shiva

2023

View full text Add to dashboard Cite

PurposeThe study explored various dimensions of overconfidence bias (OB) among retail investors in Indian financial markets. Further, these dimensions were validated through formative assessments for OB.Design/methodology/approachThe study applied exploratory factor analysis (EFA) to 764 respondents to explore dimensions of OB. These were validated with formative assessments on 489 respondents by the partial least square path modeling (PLS-PM) approach in SmartPLS 4.0 software.FindingsThe major findings of EFA explored four dimensions for OB, i.e. accuracy, perceived control, positive illusions and past investment success. The formative assessments revealed that positive illusions followed by past investment success among retail investors played an instrumental role in orchestrating the OBs that affect investment decisions in financial markets.Practical implicationsThe formative index of OB has several practical implications for registered financial and investment advisors, bank advisors, business media companies and portfolio managers, besides individual investors in the domain of behavioral finance.Originality/valueThis research provides a novel approach to provide a formative index of OB with four dimensions. This formative index can acts as an overview for upcoming researchers to investigate the OB of retail individual investors.Highlights Overconfidence bias is an important predictor of retail investors' behaviorFormative dimensions of the overconfidence bias index.Accuracy, perceived control, positive illusions and past investment success are important dimensions of overconfidence bias.Modern portfolio theory and illusion of control theory support this study.

show abstract

Section: Methodsmentioning

confidence: 99%

“…Thus, 489 investors were considered appropriate for CFA. The formative model assessment of OB was examined through SmartPLS 4.0.8.4 software (Rieger et al. , 2022; Ringle et al.…”

Section: Methodsmentioning

confidence: 99%

See 1 more Smart Citation

Specifying and validating overconfidence bias among retail investors: a formative index

Nair,

Shiva

2023

View full text Add to dashboard Cite

show abstract

“…It implies that individual utility considerations do not solely drive economic decisions but are also shaped by the broader social context. Examples include trend-following behaviors in investments or consumption, often guided by group perceptions rather than impartial analysis, showcasing collective psychology at work (Rieger et al, 2022).…”

Section: To What Extent Do Non-economic Factors Influence Economic De...mentioning

confidence: 99%

Epistemological criticism of the concept of individualism in conventional economies

Nalle,

Ismail

2024

JES

View full text Add to dashboard Cite

This research critically examines the epistemology surrounding the concept of individualism within conventional economics, focusing on elucidating the influence of non-economic factors—namely culture, social norms, and collective psychology—on economic decision-making processes. This study endeavors to uncover the role of these factors in individual economic decisions by employing a methodology rooted in analyzing economic and sociological literature. The findings shed light on the discordance between the traditional notion of individualism and the multifaceted realities of contemporary society, where culture, social norms, and collective psychology significantly shape economic behaviors and preferences. By providing nuanced insights into how these non-economic factors impact individuals' economic choices and actions, this research underscores the imperative for a broader, more inclusive perspective within economic paradigms. This study contributes to a richer comprehension of the complexities inherent in individual economic decisions when viewed against non-economic influences.

show abstract

The Influence of National Culture on Corporate Policy: Evidence from the Payment Method in International Mergers

Ghosh,

Chauhan,

Jaiswall

2024

Preprint

View full text Add to dashboard Cite

Trend following or reversal: Does culture affect predictions and trading behavior?

Cited by 3 publications

References 53 publications

Specifying and validating overconfidence bias among retail investors: a formative index

Specifying and validating overconfidence bias among retail investors: a formative index

Epistemological criticism of the concept of individualism in conventional economies

The Influence of National Culture on Corporate Policy: Evidence from the Payment Method in International Mergers

Contact Info

Product

Resources

About