3 - Oderlene Vieira de Oliveira - Programa de Pós-Graduação em Administração (PPGA)
Responsável pela submissão
4 - Elnivan Moreira de Souza Centro Universitário Christus - Departamento de Administração
5 - Juliana Silva Costa UFSM - UNIVERSIDADE FEDERAL DE SANTA MARIA - Administração
Reumo
Behavioral finance is a branch of studies in the Finance area, which gained strength in the late 1980s, by seeking to understand the antecedents and consequences of “irrational” investment strategies’ behaviors observed in the financial market. The focus of these studies was centered on the individual’s economic behavior and not on the judgment of the degree of rationality existing in their decision-making process, that is, the object of study of behavioral finance refers to the financial market investigation based on the investor’s behavior and decisions made.
Investment decision-making takes place through the evaluation of the types of assets available. In this evaluation, investors use heuristics, a mental process that attempts to alleviate the cognitive load necessary for decision-making in a complex situation. Thus, this paper aims to analyze the influence of heuristics on Brazilian investors’ behavior in the decision-making process.
Heuristics are understood as a mental simplification tool used in the decision-making process. Investors make constant mistakes because their decision-making is based on their experiences, which are interpreted as "pocket rules". These heuristics help in decision-making since they are mental paths that facilitate the perception and evaluation of the information one receives, being applied in a variable process of mental patterns, to deal with mechanisms that reduce complex evaluation tasks. Organizing and reducing the amount of information needed to understand a situation and take action.
We applied structural equation modeling by the PLS-SEM methodology. The sample is composed of 220 investors.
The heuristics of Overconfidence and Anchoring positively influence decision-making, while Loss Aversion influences negatively. The herd effect showed no influence.
The results also supported that decision-making positively influences the performance of investors. Investors feel secure in their attitudes regarding making financial decisions, even if these decisions are not always rational, as they are affected by biases.
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