The Role of Emotions in Financial Decisions – Behavioral Finance Approach

RAKOVSKÁ, Zuzana and Věra JANČUROVÁ. The Role of Emotions in Financial Decisions – Behavioral Finance Approach. In Jana Kotlebová. Proceedings of the 9th International Conference of Currency, Banking and International Finance. Bratislava: Ekonóm, University of Economics in Bratislava, 2017, p. 217-224. ISBN 978-80-225-4362-0.

Basic information

• Original name: The Role of Emotions in Financial Decisions – Behavioral Finance Approach
• Authors: RAKOVSKÁ, Zuzana (703 Slovakia, guarantor, belonging to the institution) and Věra JANČUROVÁ (203 Czech Republic, belonging to the institution).
• Edition: Bratislava, Proceedings of the 9th International Conference of Currency, Banking and International Finance, p. 217-224, 8 pp. 2017.
• Publisher: Ekonóm, University of Economics in Bratislava

Other information

• Original language: English
• Type of outcome: Proceedings paper
• Field of Study: 50200 5.2 Economics and Business
• Country of publisher: Slovakia
• Confidentiality degree: is not subject to a state or trade secret
• Publication form: printed version "print"
• WWW: URL
• RIV identification code: RIV/00216224:14560/17:00095933
• Organization unit: Faculty of Economics and Administration
• ISBN: 978-80-225-4362-0
• UT WoS: 000411851600028
• Keywords in English: emotions; attachment bias; disposition effect

Abstract

Traditional finance theory tends to ignore effects of emotions as it assumes that people always behave rationally. Emerging empirical research in behavioral finance shows that feelings do play a role in investor decision making and that individual psychology affects subsequent asset pricing. This paper examines the role of emotions in decision making of economic agents while distinguishing between two sides of debate among researches: the first, analyzing enhancing role of emotions in investment decisions and the second, arguing that emotions detract good investments. Using a qualitative, explanatory approach, the study considers connection of emotions with concepts of behavioral finance, such as disposition effect or attachment bias, and discusses how feelings contribute to explanation of these irrational behaviors observed in empirical studies of financial markets.

Links

• MUNI/A/0823/2016, interní kód MU: Name: Behaviorální, znalostní a ekonomické aspekty oceňování a obchodování finančních a jiných aktiv (Acronym: BZEAO)

Investor: Masaryk University, Category A