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Psychological profile and investment decisions

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  • Bajo, Emanuele
  • Cecchini, Marco
  • Oliver, Barry

Abstract

We conduct a study to test whether psychological factors influence stock trading behavior in a sample of 176 individuals. Using a trading simulation game, we combined financial data with demographic information, psychological traits, and risk attitudes. Our findings indicate that conscientiousness is a significant factor in explaining higher trading volume and greater risk-taking. Furthermore, demographics and risk attitude measures influenced individual investment choices. These results demonstrate that financial decision-making and the frequency of stock trading are influenced not only by our attitudes toward risk but also by our level of conscientiousness. These findings have important implications for modeling decisions under risk and providing financial advice.

Suggested Citation

  • Bajo, Emanuele & Cecchini, Marco & Oliver, Barry, 2023. "Psychological profile and investment decisions," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006177
    DOI: 10.1016/j.frl.2023.104245
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