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Using decision support to manage the influence of cognitive abilities on share trading performance

Author

Listed:
  • Alex Richardson
  • Shirley Gregor

    (School of Accounting and Business Information Systems, The Australian National University, Australia)

  • Richard Heaney

    (UWA Business School, The University of Western Australia, Australia)

Abstract

Online share trading is no longer restricted to expert brokers; there is a diverse population of traders with varying abilities and experience. Decision making in this context can be sub-optimal and risky. This study investigates how performance varies with level of cognitive ability and speed of online trading, and whether a decision aid can overcome traders’ disadvantages. The study showed that novice traders with decision support consistently outperformed those without and that the decision aid mitigated the negative effects of higher decision-making speeds and lower cognitive ability. This adds to decision making under time pressure and behavioural finance literature.

Suggested Citation

  • Alex Richardson & Shirley Gregor & Richard Heaney, 2012. "Using decision support to manage the influence of cognitive abilities on share trading performance," Australian Journal of Management, Australian School of Business, vol. 37(3), pages 523-541, December.
  • Handle: RePEc:sae:ausman:v:37:y:2012:i:3:p:523-541
    as

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