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Survey evidence on core factors of behavioral biases

Author

Listed:
  • Rieger, Marc Oliver
  • Wang, Mei
  • Huang, Po-Kai
  • Hsu, Yuan-Lin

Abstract

In the past decades, a multitude of behavioral biases with regard to financial decision-making have been found. We show that nine common judgment and decision biases can be reduced to three main latent factors that are related to belief-updating, self-judgment, and valuation. The three-factor solution can be replicated in both Taiwanese and German samples. We find some tentative evidence that cognitive reflection decreases the propensity for belief-updating biases, whereas affect, especially negative affect, increases self-judgment biases.

Suggested Citation

  • Rieger, Marc Oliver & Wang, Mei & Huang, Po-Kai & Hsu, Yuan-Lin, 2022. "Survey evidence on core factors of behavioral biases," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    • Handle: RePEc:eee:soceco:v:100:y:2022:i:c:s2214804322000866
    DOI: 10.1016/j.socec.2022.101912
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    References listed on IDEAS

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    8. Marc Oliver Rieger & Mei Wang & Thorsten Hens, 2017. "Estimating cumulative prospect theory parameters from an international survey," Theory and Decision, Springer, vol. 82(4), pages 567-596, April.
    9. Wang, Mei & Rieger, Marc Oliver & Hens, Thorsten, 2011. "How Time Preferences Differ: Evidence from 45 Countries," Discussion Papers 2011/18, Norwegian School of Economics, Department of Business and Management Science.
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    Cited by:

    1. Silva, Emmanuel Marques & Moreira, Rafael de Lacerda & Bortolon, Patricia Maria, 2023. "Mental Accounting and decision making: a systematic literature review," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).

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    More about this item

    Keywords

    Investment behavior; Behavioral decision making; Psychological biases; Emotional state measures; Cognitive strategies;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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