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Are emotions exacerbating the recency bias?: An experimental study

Author

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  • Felizia Arni Rudiawarni
  • I. Made Narsa
  • Bambang Tjahjadi

Abstract

This research aims to examine whether emotions can affect the recency bias in judgement and decision making (JDM). This study finds that the effect of recency bias is so strong that emotion does not affect the recency bias experienced by participants when making decisions. Further analysis shows that humans tend to weigh negative information more heavily than positive information. This research contributes to behavioural finance research in which this research incorporates an element of emotion in the recency bias, where this is so far known, is still not widely researched, especially in emerging market.

Suggested Citation

  • Felizia Arni Rudiawarni & I. Made Narsa & Bambang Tjahjadi, 2020. "Are emotions exacerbating the recency bias?: An experimental study," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 13(1), pages 61-70.
    • Handle: RePEc:ids:ijtrgm:v:13:y:2020:i:1:p:61-70
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    Cited by:

    1. Rao, Purnima & Goyal, Nisha & Kumar, Satish & Hassan, M. Kabir & Shahimi, Shahida, 2021. "Vulnerability of financial markets in India: The contagious effect of COVID-19," Research in International Business and Finance, Elsevier, vol. 58(C).
    2. Goodell, John W. & Kumar, Satish & Rao, Purnima & Verma, Shubhangi, 2023. "Emotions and stock market anomalies: A systematic review," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).

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