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The Impact of Psychological Biases on the Decision-making of the Individual Albanian Investor

Author

Listed:
  • Blerina Dervishaj

    (Faculty of Economy, University of Vlora Ismail Qemali , Albania,)

  • Teftjola Xhaferi

    (EAE Business School, Madrid, Master in Financial Management, Spain)

Abstract

The study aims to measure the impact of psychological biases on financial decisions of the albanian individual investor. The paper uses primary data provided through structured interviews with 180 individual investors and one semi-structured interview with an expert of the financial market in Albania. Exploratory Financial Analysis, Cronbach alpha test and descriptive analysis are used through R- software. The analysis and its results conclude a significant presence of psychological biases on the albanian individual investor behaviour. As there is too little research done on this field in Albania, the study informs of the presence of these biases and tries to explain their impact not only on the previous crisis the country has experienced, but also on the current situation of the financial market in the country.

Suggested Citation

  • Blerina Dervishaj & Teftjola Xhaferi, 2020. "The Impact of Psychological Biases on the Decision-making of the Individual Albanian Investor," International Journal of Economics and Financial Issues, Econjournals, vol. 10(3), pages 35-46.
    • Handle: RePEc:eco:journ1:2020-03-6
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    References listed on IDEAS

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    More about this item

    Keywords

    psychological bias; individual investitor; financial decision-making; financial market.;
    All these keywords.

    JEL classification:

    • G - Financial Economics
    • G4 - Financial Economics - - Behavioral Finance
    • 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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