Is it risky? The impact of personality traits and behavioural biases on investment decisions

Yanuarti, Ika and Cham, Tat-Huei and Cheng, Eaw Hooi and Annuar, Nursyamilah and Mirzaliev, Sanjar (2025) Is it risky? The impact of personality traits and behavioural biases on investment decisions. Asian Journal of Business Research, 15 (1). pp. 104-120. ISSN 1178-8933

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Abstract

Investors’ decisions are often influenced by behavioural biases like the availability bias and the disposition effect, which are shaped by personality traits such as openness, conscientiousness, extraversion, agreeableness, and neuroticism. This study investigates how these traits impact these biases, drawing from Bounded Rationality Theory and Dual Process Theory, which suggest that investment decisions blend rational (cognitive) and irrational (intuitive) elements. Using a quantitative approach with 716 participants, the data was analysed through the structural equation modelling (SEM) statistical technique using SmartPLS. Findings reveal that availability bias is positively influenced by openness and agreeableness. Conversely, the disposition effect is positively associated with openness, extraversion, and agreeableness. Investors who exhibit high levels of openness, extraversion, and agreeableness typically base their decisions on available information, often selling profitable stocks and holding onto declining ones, which can result in investment losses. Identifying these biases is crucial for investors, managers, and regulators as they navigate investment decisions effectively.

Item Type:	Article
Keywords:	Agreeableness, Conscientiousness, Consumer behaviour, Extraversion, Neuroticism, Openness.
Subjects:	600 Technology (Applied Sciences) > 650 Management and Public Relations > 658 General management (Risk Management, Profit and Loss, Logistics) > 658.8 Mall, Shopping Center, E-Commerce 600 Technology (Applied Sciences) > 650 Management and Public Relations > 658 General management (Risk Management, Profit and Loss, Logistics) > 658.8 Mall, Shopping Center, E-Commerce > 658.8342 Consumer Behavior
Divisions:	Faculty of Business > Management
Depositing User:	Administrator UMN Library
Date Deposited:	23 May 2025 03:08
Last Modified:	23 May 2025 03:08
URI:	https://kc.umn.ac.id/id/eprint/37324

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