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The Impact of the Behavioral Factors on Investment Decision-Making: A Systemic Review on Financial Institutions

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Proceedings of the International Conference on Advanced Intelligent Systems and Informatics 2020 (AISI 2020)

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 1261))

Abstract

The purpose of the study is to identify the effects of behavioral factors (cognitive biases) on financial decision-making. A systematic review method was implemented and selected 29 research published studies between the years 2010-2020 and were critically reviewed. The main findings of the study indicate that the most common factors appear in papers were overconfidence (18), anchoring bias (11), herding effect (10) and loss aversion (9), which has a significant impact on the financial decision making process. Moreover, almost half of the articles were survey-based (questionnaire), quantitative method and the rest of the articles were the qualitative and mixed-methods. The study concluded that the overall impact of behavioral/psychological factors highly influence on financial decision-making. However, the time and search of the key terms in the papers’ title were considered as the key limitations, which prevent in-depth investigation of the study. For future research, those most repetitive cognitive bias should be measured during COVID-19 pandemic uncertain situation.

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Author information

Authors and Affiliations

  1. University of Sharjah, Sharjah, UAE

    Syed Faisal Shah & Muhammad Alshurideh

  2. Faculty of Business, University of Jordan, Amman, Jordan

    Muhammad Alshurideh

  3. Amman Arab University, Amman, Jordan

    Barween Al Kurdi

  4. Research Institute of Sciences and Engineering, University of Sharjah, Sharjah, UAE

    Said A. Salloum

Authors
  1. Syed Faisal Shah
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  2. Muhammad Alshurideh
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  3. Barween Al Kurdi
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  4. Said A. Salloum
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Correspondence to Muhammad Alshurideh .

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Editors and Affiliations

  1. Faculty of Computers and Artificial Intelligence, Information Technology Department, and Chair of the Scientific Research Group in Egypt, Cairo University, Cairo, Egypt

    Aboul Ella Hassanien

  2. Department of Electronics and Computer Science, Koszalin University of Technology, Koszalin, Poland

    Adam Slowik

  3. Faculty of Electrical Engineering and Computer Science, VŠB-Technical University of Ostrava, Ostrava-Poruba, Moravskoslezsky, Czech Republic

    Václav Snášel

  4. Rector of the Electronic Research Institute, Cairo, Egypt

    Hisham El-Deeb

  5. Faculty of computers and information, Ain Shams University, Cairo, Egypt

    Fahmy M. Tolba

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Shah, S.F., Alshurideh, M., Kurdi, B.A., Salloum, S.A. (2021). The Impact of the Behavioral Factors on Investment Decision-Making: A Systemic Review on Financial Institutions. In: Hassanien, A.E., Slowik, A., Snášel, V., El-Deeb, H., Tolba, F.M. (eds) Proceedings of the International Conference on Advanced Intelligent Systems and Informatics 2020. AISI 2020. Advances in Intelligent Systems and Computing, vol 1261. Springer, Cham. https://doi.org/10.1007/978-3-030-58669-0_9

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