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Do heuristics affect Brazilian investors’ decision-making process?

Author

Listed:
  • Virgílio Vasconcelos Souza
  • Lucas Lopes Ferreira Souza
  • Oderlene Oliveira
  • Elnivan Moreira de Souza
  • Juliana Silva Costa

Abstract

Purpose - The purpose of this research is to analyze the influence of heuristics on Brazilian investors' behavior in the decision-making process. Design/methodology/approach - The authors apply the partial least squares structural equation modeling methodology. This sample is composed of 220 investors. Findings - The heuristics of overconfidence and anchoring positively influence investors' decision-making, while loss aversion negatively influences it. The herd effect exhibits no influence. The results also support the idea that decision-making positively influences investors' performance. Investors feel secure in their attitudes regarding financial decision-making, even if their decisions are not always rational as they are affected by biases. Originality/value - This article explains the influence of heuristics on investors' decision-making and performance in the Brazilian context during the COVID-19 pandemic.

Suggested Citation

  • Virgílio Vasconcelos Souza & Lucas Lopes Ferreira Souza & Oderlene Oliveira & Elnivan Moreira de Souza & Juliana Silva Costa, 2023. "Do heuristics affect Brazilian investors’ decision-making process?," Review of Behavioral Finance, Emerald Group Publishing Limited, vol. 16(2), pages 282-299, July.
    • Handle: RePEc:eme:rbfpps:rbf-09-2022-0210
    DOI: 10.1108/RBF-09-2022-0210
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