Open AccessThe effect of behavioral biases on financial decisions
Author(s) -
David Peón,
Manel Antelo
Publication year - 2021
Publication title -
revista estrategia organizacional
Language(s) - English
Resource type - Journals
eISSN - 2539-2786
pISSN - 2339-3866
DOI - 10.22490/25392786.4963
Subject(s) - heuristics , framing (construction) , framing effect , cognitive bias , behavioral economics , empirical research , set (abstract data type) , exposition (narrative) , cognition , psychology , actuarial science , finance , economics , social psychology , computer science , persuasion , art , philosophy , literature , structural engineering , epistemology , neuroscience , programming language , operating system , engineering
Financial management decisions are made by people, and people, in all instances, are shaped by their behavioral traits. Here we provide extensive insight on the theoretical and empirical analysis made on cognitive biases and their influence on financial decisions. To provide a systematic exposition, we set three broad categories: heuristics and biases, choices (including framing and preferences) and social factors. We then describe the main biases within each category and provide an extensive revision of the main theoretical and empirical developments about their impact on financial decisions.