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Behavioural Factors in the Hungarian Retail Government Bond Market

Author

Listed:
  • Gábor Kutasi

    (Corvinus University of Budapest)

  • László György

    (Századvég Gazdaságkutató Zrt.)

  • Krisztina Szabó

    (Corvinus University of Budapest)

Abstract

It has long been known that the decision-making of money market participants deviates from the pattern outlined by textbook models. This study attempts to explore the real processes taking the approach of behavioural finance, and analyses the hypothetical investment decisions of Hungarian retail government bond investors based on the literature of behavioural finance theses. The analysis relies on the results of a representative opinion poll using behavioural finance theory on the government bond market as a basis. The survey covers the political, emotional and literacy factors underlying the decisions. It examines the herding effect, the influence of demographic factors, and as a new approach, it outlines the profile of Hungarian retail investors. One other novel result of the survey is that it confirms a number of commonly known assumptions about the behaviour of retail investors through collecting data, while reviewing and synthesising behavioural finance literature specifically relevant to the government bond market.

Suggested Citation

  • Gábor Kutasi & László György & Krisztina Szabó, 2018. "Behavioural Factors in the Hungarian Retail Government Bond Market," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(1), pages 110-136.
    • Handle: RePEc:mnb:finrev:v:17:y:2018:i:1:p:110-136
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    File URL: http://english.hitelintezetiszemle.hu/letoltes/fer-17-1-st5-kutasi-gyorgy-szabo.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    behavioural finance; government bond; retail investor; non-rational decision-making;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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