Irrationality and Bounded Rationality - Empirical Study on the Behavior of Investors in the Chinese Stock Market

Author: Jiang Xiaodong
Publisher:
Publish Date: 2006-08-01
Features: Irrationality and Bounded Rationality, this research has at least the following two important significances: , for individual investors, this study can help understand the relationship between investment behavior and investment returns, understand the impact of gender and stock holding period on investment behavior, and understand the application of heuristics in investment decisions. This provides direct reference for individual investors to recognize their own investment decision-making process and make more scientific investment decisions. Second, for regulatory authorities, it can help understand the underlying reasons behind some seemingly "irrational" investor behaviors, and understand the psychological reasons for certain behaviors that cause overall stock market volatility. This plays an important role in enabling securities regulatory authorities to take more effective measures to protect investors' rights and prevent excessive stock market volatility. The study of investor behavior is still a young discipline, and relevant research in China has just begun. This book is adapted from the author's doctoral dissertation and has the following innovations: First, through field research and obtaining valuable personal investor trading account data from a securities company's data warehouse, statistical indicators were designed to objectively measure the trading activity and performance of individual investors, ensuring the entire empirical research is based on accurate data. Second, starting from the individual behavior of investors, three new explanations were proposed for the high turnover rate in the Chinese stock market. Third, for the first time, the heuristic decision-making psychology of investors was introduced into the predictive model, significantly improving the accuracy of the predictions. This research has the following two important significances: , for individual investors, this study can help understand the relationship between investment behavior and investment returns, understand the impact of gender and stock holding period on investment behavior, and understand the application of heuristics in investment decisions. This provides direct reference for individual investors to recognize their own investment decision-making process and make more scientific investment decisions. Second, for regulatory authorities, it can help understand the underlying reasons behind some seemingly "irrational" investor behaviors, and understand the psychological reasons for certain behaviors that cause overall stock market volatility. This plays an important role in enabling securities regulatory authorities to take more effective measures to protect investors' rights and prevent excessive stock market volatility. The study of investor behavior is still a young discipline, and relevant research in China has just begun. This book is adapted from the author's doctoral dissertation and has the following innovations: First, through field research and obtaining valuable personal investor trading account data from a securities company's data warehouse, statistical indicators were designed to objectively measure the trading activity and performance of individual investors, ensuring the entire empirical research is based on accurate data. Second, starting from the individual behavior of investors, three new explanations were proposed for the high turnover rate in the Chinese stock market. Third, for the first time, the heuristic decision-making psychology of investors was introduced into the predictive model, significantly improving the accuracy of the predictions.