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Behavioral biases of finance professionals: Turkish evidence

Author

Listed:
  • Kiymaz, Halil
  • Öztürkkal, Belma
  • Akkemik, K. Ali

Abstract

This study extends the existing literature on the determinants of behavioral biases of Turkish finance sector professionals. It examines the impact of various personal and objective attributes of finance sector professionals on their risk choices derived from their portfolio allocation, and personal wealth data. Utilizing survey data from 206 professionals, we find that these professionals take higher risk in the form of investment in equities when investing in home country firms (geographic bias) and investing in firms headquartered in their home towns (home bias). Those relying on their own predictions when making investment decisions and those with emotional biases invest less in equities. Findings further show that younger professionals, professional with less education, with lower risk aversion, and with single broker accounts are more likely to invest in equities. We also find that those with higher expected returns invest more in equities, showing overconfidence. Subsample analysis results for finance professionals suggest that portfolio managers and brokerage company professionals display differing risk taking behavior.

Suggested Citation

  • Kiymaz, Halil & Öztürkkal, Belma & Akkemik, K. Ali, 2016. "Behavioral biases of finance professionals: Turkish evidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 12(C), pages 101-111.
    • Handle: RePEc:eee:beexfi:v:12:y:2016:i:c:p:101-111
    DOI: 10.1016/j.jbef.2016.10.001
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    Cited by:

    1. Dela Cruz, Aeson Luiz & Patel, Chris & Ying, Sammy & Pan, Peipei, 2020. "The relevance of professional skepticism to finance professionals’ Socially Responsible Investing decisions," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    2. Şenol, Doğaç & Onay, Ceylan, 2023. "Impact of gamification on mitigating behavioral biases of investors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    3. Orie E. Barron & Charles R. Enis & Hong Qu, 2021. "Do Financial Professionals Process Information Better as a Group Than Non-Professionals?," JRFM, MDPI, vol. 14(5), pages 1-18, May.
    4. Adrià Pons & Eduard Cristobal-Fransi & Carla Vintrò & Josep Rius & Oriol Querol & Jordi Vilaplana, 2023. "An Application of the IFM Method for the Risk Assessment of Financial Instruments," Computational Economics, Springer;Society for Computational Economics, vol. 61(1), pages 295-315, January.

    More about this item

    Keywords

    Behavioral biases; Risk; Equity; Financial literacy; Investor;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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