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Irrational Behavior of Youth When Taking Financial Decisions

Author

Listed:
  • Stepanova
  • D.I.
  • Garnov
  • A.P.
  • Brykin
  • A.V.
  • Jancikova
  • E.

Abstract

Purpose: The article contains research on internal factors of irrational behaviour initiated by the objective to reveal correlation between individual and personal, psychological peculiarities and irrational behavior in life situations. Design/Methodology/Approach: The article is based on a hypothesis that there is a correlation between personal peculiarities and an irrational choice when students of economic HEIs make decisions of economic nature. Such life-purpose orientations as “Locus of control ─ Me” and “Locus of control ─ Life” are connected with irrational economic behavior. Findings: The study allows enriching the subject field of behavioral economics from the point of view of the specificity of economic and psychological characteristics, attitudes towards an economic choice, and the identification of emotional and personal indicators of irrational behavior. It has been revealed that the psychological characteristics of a person (mental processes, orientation of an individual, life-purpose orientations) influence students’ irrational economic behavior. Practical Implications: The results of the study can be used by economic institutions (HEIs) in the selection of students for educational programs. The developed diagnostic game technique, the styles of irrational behavior described by the authors can be used in the practice of the educational process of economic HEIs or in assessing the propensity to make irrational economic decisions in other areas of human activity Originality/Value: The main contribution of this study is the clarification of factors of finacial behavior of youth.

Suggested Citation

  • Stepanova & D.I. & Garnov & A.P. & Brykin & A.V. & Jancikova & E., 2019. "Irrational Behavior of Youth When Taking Financial Decisions," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(Special 1), pages 378-387.
    • Handle: RePEc:ers:ijebaa:v:vii:y:2019:i:special1:p:378-387
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    References listed on IDEAS

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    1. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    2. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    3. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    4. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
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    Cited by:

    1. Rao, Aniruddha S. & Lakkol, Savitha G., 2022. "A review on personality models and investment decisions," Journal of Behavioral and Experimental Finance, Elsevier, vol. 35(C).

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    More about this item

    Keywords

    Rationality; rational economic behavior & thinking; economic irrationality.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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