Empirical Evidence of Cognitive Biases among Chinese Investors

Research Article
Open access

Empirical Evidence of Cognitive Biases among Chinese Investors

Manqi Zhang 1*
  • 1 CreditEase Corp    
  • *corresponding author Frankiezhang6@gmail.com
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/9/20230379
AEMPS Vol.9
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-45-4
ISBN (Online): 978-1-915371-46-1

Abstract

The convoluted world of finance is filled with a number of irrationalities that the science of behavioral finance seeks to explain by bringing cognitive biases. Cognitive bias is a systematic pattern of deviation from rationality and is caused by limited cognitive capacities. By specifically analyzing Chinese investors, the paper aims to identify common cognitive biases exercised by high net-worth Chinese investors that lead to insufficient diversification and naive diversification in portfolio construction and to explain the following scenarios that are not commensurate with classic financial theories: the reason why investors prefer rule of thumbs instead of complete diversification; or when they do diversify, they simply takes N instruments and consider it done; the fact that people stick with a chosen stock or fund even when their prospects are not favored and other opportunity has arisen; and that investors from the same social background as a whole might have experienced certain preferences. And finally, when the cognitive biases are exercised by large enough of a population, stock market might suffer abnormal variances from it. The answers to these questions are studied by qualitative research methodology in this paper, narrative inquiry and inductive approach, to generalize and conclude to observed examples.

Keywords:

behavioral finance, cognitive bias, emerging market

Zhang,M. (2023). Empirical Evidence of Cognitive Biases among Chinese Investors. Advances in Economics, Management and Political Sciences,9,205-210.
Export citation

References

[1]. Ricciardi, V., & Simon, H. K. (2000). What is behavioral finance?. Business, Education & Technology Journal, 2(2), 1-9.

[2]. Ritter, J. R. (2003). Behavioral finance. Pacific-Basin finance journal, 11(4), 429-437.

[3]. Hirshleifer, D. (2015). Behavioral finance. Annual Review of Financial Economics, 7, 133-159.

[4]. Hilary G, Hui KW (2009). Does religion matter in corporate decision making in America? J. Fin. Econ., 93: 455-73.

[5]. Hong, H., & Kacperczyk, M. (2009). The price of sin: The effects of social norms on markets. Journal of financial economics, 93(1), 15-36.

[6]. Kumar, A. (2009). Who gambles in the stock market?. The Journal of Finance, 64(4), 1889-1933.

[7]. Kumar, A., Page, J. K., & Spalt, O. G. (2011). Religious beliefs, gambling attitudes, and financial market outcomes. Journal of financial economics, 102(3), 671-708.

[8]. McGuire, S. T., Omer, T. C., & Sharp, N. Y. (2012). The impact of religion on financial reporting irregularities. The Accounting Review, 87(2), 645-673.

[9]. Hong, H., & Kostovetsky, L. (2012). Red and blue investing: Values and finance. Journal of Financial Economics, 103(1), 1-19.

[10]. Hutton, I., Jiang, D., & Kumar, A. (2014). Corporate policies of Republican managers. Journal of Financial and Quantitative analysis, 49(5-6), 1279-1310.

[11]. Oprean, C., & Tanasescu, C. (2014). Effects of behavioural finance on emerging capital markets. Procedia Economics and Finance, 15, 1710-1716.

[12]. Economou, F., Hassapis, C., & Philippas, N. (2018). Investors’ fear and herding in the stock market. Applied Economics, 50(34-35), 3654-3663.

[13]. Li, Z., Diao, X., & Wu, C. (2022). The influence of mobile trading on return dispersion and herding behavior. Pacific-Basin Finance Journal, 73, 101767.

[14]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[15]. Demirer, R., & Kutan, A. M. (2006). Does herding behavior exist in Chinese stock markets?. Journal of international Financial markets, institutions and money, 16(2), 123-142.

[16]. Choi, K. H., & Yoon, S. M. (2020). Investor sentiment and herding behavior in the Korean stock market. International Journal of Financial Studies, 8(2), 34.

[17]. Brendea, G., & Pop, F. (2019). Herding behavior and financing decisions in Romania. Managerial Finance.

[18]. Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128.

[19]. Benartzi, S., & Thaler, R. H. (2001). Naive diversification strategies in defined contribution saving plans. American economic review, 91(1), 79-98.

[20]. French, K. R., & Poterba, J. M. (1991). Investor diversification and international equity markets.

[21]. Lai, S., & Teo, M. (2008). Home-biased analysts in emerging markets. Journal of Financial and Quantitative Analysis, 43(3), 685-716.

[22]. Graham, J. R., Harvey, C. R., & Huang, H. (2009). Investor competence, trading frequency, and home bias. Management Science, 55(7), 1094-1106.

[23]. Kim, G. H., & Kim, H. (2022). Non-fundamental home bias in international equity markets. International Economics, 170, 213-234.

[24]. Lin, L., & Puchniak, D. W. (2022). Institutional Investors in China: Corporate Governance and Policy Channeling in the Market Within the State. Columbia Journal of Asian Law, 35(1), 74-159.

[25]. Chen, G. M., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2004). Behavior and performance of emerging market investors: Evidence from China. Unpublished Washington State University Working paper (January).

[26]. Lucey, B. M., & Dowling, M. (2013). Cultural behavioral finance in emerging markets. Emerging Markets and the Global Economy: A Handbook, 327.

[27]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.

[28]. Bateman, H., Eckert, C., Iskhakov, F., Louviere, J., Satchell, S., & Thorp, S. (2017). Default and naive diversification heuristics in annuity choice. Australian Journal of Management, 42(1), 32-57.

[29]. Bansal, T. (2020). Behavioral finance and COVID-19: cognitive errors that determine the financial future. Available at SSRN 3595749.

[30]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[31]. Jiang, R., Wen, C., Zhang, R., & Cui, Y. (2022). Investor's herding behavior in Asian equity markets during COVID-19 period. Pacific-Basin Finance Journal, 73, 101771.

[32]. Ririn Stefani Silitonga, Isfenti Sadalia, Amlys Syahputra Silalahi. (2021). Analysis of Herding Behavior in Developing Countries. International Journal of Research and Review. Vol.8; Issue: 12

[33]. Hirshleifer, D. (2001). Investor psychology and asset pricing. Journal of Finance, 56, 1533-1597.

[34]. Thaler, R. H., Tversky, A., Kahneman, D., & Schwartz, A. (1997). The effect of myopia and loss aversion on risk taking: An experimental test. The quarterly journal of economics, 112(2), 647-661.

[35]. Tversky, A., & Kahneman, D. (1989). Rational choice and the framing of decisions. In Multiple criteria decision making and risk analysis using microcomputers (pp. 81-126). Springer, Berlin, Heidelberg.

[36]. Chaffai, M., & Medhioub, I. (2014). Behavioral finance: An empirical study of the Tunisian stock market. International Journal of Economics and Financial Issues, 4(3), 527-538.

[37]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.

[38]. Ricciardi, V., & Simon, H. K. (2000). What is behavioral finance?. Business, Education & Technology Journal, 2(2), 1-9.

[39]. Ritter, J. R. (2003). Behavioral finance. Pacific-Basin finance journal, 11(4), 429-437.

[40]. Hirshleifer, D. (2015). Behavioral finance. Annual Review of Financial Economics, 7, 133-159.

[41]. Hilary G, Hui KW (2009). Does religion matter in corporate decision making in America? J. Fin. Econ., 93: 455-73.

[42]. Hong, H., & Kacperczyk, M. (2009). The price of sin: The effects of social norms on markets. Journal of financial economics, 93(1), 15-36.

[43]. Kumar, A. (2009). Who gambles in the stock market?. The Journal of Finance, 64(4), 1889-1933.

[44]. Kumar, A., Page, J. K., & Spalt, O. G. (2011). Religious beliefs, gambling attitudes, and financial market outcomes. Journal of financial economics, 102(3), 671-708.

[45]. McGuire, S. T., Omer, T. C., & Sharp, N. Y. (2012). The impact of religion on financial reporting irregularities. The Accounting Review, 87(2), 645-673.

[46]. Hong, H., & Kostovetsky, L. (2012). Red and blue investing: Values and finance. Journal of Financial Economics, 103(1), 1-19.

[47]. Hutton, I., Jiang, D., & Kumar, A. (2014). Corporate policies of Republican managers. Journal of Financial and Quantitative analysis, 49(5-6), 1279-1310.

[48]. Oprean, C., & Tanasescu, C. (2014). Effects of behavioural finance on emerging capital markets. Procedia Economics and Finance, 15, 1710-1716.

[49]. Economou, F., Hassapis, C., & Philippas, N. (2018). Investors’ fear and herding in the stock market. Applied Economics, 50(34-35), 3654-3663.

[50]. Li, Z., Diao, X., & Wu, C. (2022). The influence of mobile trading on return dispersion and herding behavior. Pacific-Basin Finance Journal, 73, 101767.

[51]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[52]. Demirer, R., & Kutan, A. M. (2006). Does herding behavior exist in Chinese stock markets?. Journal of international Financial markets, institutions and money, 16(2), 123-142.

[53]. Choi, K. H., & Yoon, S. M. (2020). Investor sentiment and herding behavior in the Korean stock market. International Journal of Financial Studies, 8(2), 34.

[54]. Brendea, G., & Pop, F. (2019). Herding behavior and financing decisions in Romania. Managerial Finance.

[55]. Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128.

[56]. Benartzi, S., & Thaler, R. H. (2001). Naive diversification strategies in defined contribution saving plans. American economic review, 91(1), 79-98.

[57]. French, K. R., & Poterba, J. M. (1991). Investor diversification and international equity markets.

[58]. Lai, S., & Teo, M. (2008). Home-biased analysts in emerging markets. Journal of Financial and Quantitative Analysis, 43(3), 685-716.

[59]. Graham, J. R., Harvey, C. R., & Huang, H. (2009). Investor competence, trading frequency, and home bias. Management Science, 55(7), 1094-1106.

[60]. Kim, G. H., & Kim, H. (2022). Non-fundamental home bias in international equity markets. International Economics, 170, 213-234.

[61]. Lin, L., & Puchniak, D. W. (2022). Institutional Investors in China: Corporate Governance and Policy Channeling in the Market Within the State. Columbia Journal of Asian Law, 35(1), 74-159.

[62]. Chen, G. M., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2004). Behavior and performance of emerging market investors: Evidence from China. Unpublished Washington State University Working paper (January).

[63]. Lucey, B. M., & Dowling, M. (2013). Cultural behavioral finance in emerging markets. Emerging Markets and the Global Economy: A Handbook, 327.

[64]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.

[65]. Bateman, H., Eckert, C., Iskhakov, F., Louviere, J., Satchell, S., & Thorp, S. (2017). Default and naive diversification heuristics in annuity choice. Australian Journal of Management, 42(1), 32-57.

[66]. Bansal, T. (2020). Behavioral finance and COVID-19: cognitive errors that determine the financial future. Available at SSRN 3595749.

[67]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[68]. Jiang, R., Wen, C., Zhang, R., & Cui, Y. (2022). Investor's herding behavior in Asian equity markets during COVID-19 period. Pacific-Basin Finance Journal, 73, 101771.

[69]. Ririn Stefani Silitonga, Isfenti Sadalia, Amlys Syahputra Silalahi. (2021). Analysis of Herding Behavior in Developing Countries. International Journal of Research and Review. Vol.8; Issue: 12

[70]. Hirshleifer, D. (2001). Investor psychology and asset pricing. Journal of Finance, 56, 1533-1597.

[71]. Thaler, R. H., Tversky, A., Kahneman, D., & Schwartz, A. (1997). The effect of myopia and loss aversion on risk taking: An experimental test. The quarterly journal of economics, 112(2), 647-661.

[72]. Tversky, A., & Kahneman, D. (1989). Rational choice and the framing of decisions. In Multiple criteria decision making and risk analysis using microcomputers (pp. 81-126). Springer, Berlin, Heidelberg.

[73]. Chaffai, M., & Medhioub, I. (2014). Behavioral finance: An empirical study of the Tunisian stock market. International Journal of Economics and Financial Issues, 4(3), 527-538.

[74]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.


Cite this article

Zhang,M. (2023). Empirical Evidence of Cognitive Biases among Chinese Investors. Advances in Economics, Management and Political Sciences,9,205-210.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

Disclaimer/Publisher's Note

The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.

About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN:978-1-915371-45-4(Print) / 978-1-915371-46-1(Online)
Editor:Canh Thien Dang, Javier Cifuentes-Faura
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.9
ISSN:2754-1169(Print) / 2754-1177(Online)

© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open access policy for details).

References

[1]. Ricciardi, V., & Simon, H. K. (2000). What is behavioral finance?. Business, Education & Technology Journal, 2(2), 1-9.

[2]. Ritter, J. R. (2003). Behavioral finance. Pacific-Basin finance journal, 11(4), 429-437.

[3]. Hirshleifer, D. (2015). Behavioral finance. Annual Review of Financial Economics, 7, 133-159.

[4]. Hilary G, Hui KW (2009). Does religion matter in corporate decision making in America? J. Fin. Econ., 93: 455-73.

[5]. Hong, H., & Kacperczyk, M. (2009). The price of sin: The effects of social norms on markets. Journal of financial economics, 93(1), 15-36.

[6]. Kumar, A. (2009). Who gambles in the stock market?. The Journal of Finance, 64(4), 1889-1933.

[7]. Kumar, A., Page, J. K., & Spalt, O. G. (2011). Religious beliefs, gambling attitudes, and financial market outcomes. Journal of financial economics, 102(3), 671-708.

[8]. McGuire, S. T., Omer, T. C., & Sharp, N. Y. (2012). The impact of religion on financial reporting irregularities. The Accounting Review, 87(2), 645-673.

[9]. Hong, H., & Kostovetsky, L. (2012). Red and blue investing: Values and finance. Journal of Financial Economics, 103(1), 1-19.

[10]. Hutton, I., Jiang, D., & Kumar, A. (2014). Corporate policies of Republican managers. Journal of Financial and Quantitative analysis, 49(5-6), 1279-1310.

[11]. Oprean, C., & Tanasescu, C. (2014). Effects of behavioural finance on emerging capital markets. Procedia Economics and Finance, 15, 1710-1716.

[12]. Economou, F., Hassapis, C., & Philippas, N. (2018). Investors’ fear and herding in the stock market. Applied Economics, 50(34-35), 3654-3663.

[13]. Li, Z., Diao, X., & Wu, C. (2022). The influence of mobile trading on return dispersion and herding behavior. Pacific-Basin Finance Journal, 73, 101767.

[14]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[15]. Demirer, R., & Kutan, A. M. (2006). Does herding behavior exist in Chinese stock markets?. Journal of international Financial markets, institutions and money, 16(2), 123-142.

[16]. Choi, K. H., & Yoon, S. M. (2020). Investor sentiment and herding behavior in the Korean stock market. International Journal of Financial Studies, 8(2), 34.

[17]. Brendea, G., & Pop, F. (2019). Herding behavior and financing decisions in Romania. Managerial Finance.

[18]. Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128.

[19]. Benartzi, S., & Thaler, R. H. (2001). Naive diversification strategies in defined contribution saving plans. American economic review, 91(1), 79-98.

[20]. French, K. R., & Poterba, J. M. (1991). Investor diversification and international equity markets.

[21]. Lai, S., & Teo, M. (2008). Home-biased analysts in emerging markets. Journal of Financial and Quantitative Analysis, 43(3), 685-716.

[22]. Graham, J. R., Harvey, C. R., & Huang, H. (2009). Investor competence, trading frequency, and home bias. Management Science, 55(7), 1094-1106.

[23]. Kim, G. H., & Kim, H. (2022). Non-fundamental home bias in international equity markets. International Economics, 170, 213-234.

[24]. Lin, L., & Puchniak, D. W. (2022). Institutional Investors in China: Corporate Governance and Policy Channeling in the Market Within the State. Columbia Journal of Asian Law, 35(1), 74-159.

[25]. Chen, G. M., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2004). Behavior and performance of emerging market investors: Evidence from China. Unpublished Washington State University Working paper (January).

[26]. Lucey, B. M., & Dowling, M. (2013). Cultural behavioral finance in emerging markets. Emerging Markets and the Global Economy: A Handbook, 327.

[27]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.

[28]. Bateman, H., Eckert, C., Iskhakov, F., Louviere, J., Satchell, S., & Thorp, S. (2017). Default and naive diversification heuristics in annuity choice. Australian Journal of Management, 42(1), 32-57.

[29]. Bansal, T. (2020). Behavioral finance and COVID-19: cognitive errors that determine the financial future. Available at SSRN 3595749.

[30]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[31]. Jiang, R., Wen, C., Zhang, R., & Cui, Y. (2022). Investor's herding behavior in Asian equity markets during COVID-19 period. Pacific-Basin Finance Journal, 73, 101771.

[32]. Ririn Stefani Silitonga, Isfenti Sadalia, Amlys Syahputra Silalahi. (2021). Analysis of Herding Behavior in Developing Countries. International Journal of Research and Review. Vol.8; Issue: 12

[33]. Hirshleifer, D. (2001). Investor psychology and asset pricing. Journal of Finance, 56, 1533-1597.

[34]. Thaler, R. H., Tversky, A., Kahneman, D., & Schwartz, A. (1997). The effect of myopia and loss aversion on risk taking: An experimental test. The quarterly journal of economics, 112(2), 647-661.

[35]. Tversky, A., & Kahneman, D. (1989). Rational choice and the framing of decisions. In Multiple criteria decision making and risk analysis using microcomputers (pp. 81-126). Springer, Berlin, Heidelberg.

[36]. Chaffai, M., & Medhioub, I. (2014). Behavioral finance: An empirical study of the Tunisian stock market. International Journal of Economics and Financial Issues, 4(3), 527-538.

[37]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.

[38]. Ricciardi, V., & Simon, H. K. (2000). What is behavioral finance?. Business, Education & Technology Journal, 2(2), 1-9.

[39]. Ritter, J. R. (2003). Behavioral finance. Pacific-Basin finance journal, 11(4), 429-437.

[40]. Hirshleifer, D. (2015). Behavioral finance. Annual Review of Financial Economics, 7, 133-159.

[41]. Hilary G, Hui KW (2009). Does religion matter in corporate decision making in America? J. Fin. Econ., 93: 455-73.

[42]. Hong, H., & Kacperczyk, M. (2009). The price of sin: The effects of social norms on markets. Journal of financial economics, 93(1), 15-36.

[43]. Kumar, A. (2009). Who gambles in the stock market?. The Journal of Finance, 64(4), 1889-1933.

[44]. Kumar, A., Page, J. K., & Spalt, O. G. (2011). Religious beliefs, gambling attitudes, and financial market outcomes. Journal of financial economics, 102(3), 671-708.

[45]. McGuire, S. T., Omer, T. C., & Sharp, N. Y. (2012). The impact of religion on financial reporting irregularities. The Accounting Review, 87(2), 645-673.

[46]. Hong, H., & Kostovetsky, L. (2012). Red and blue investing: Values and finance. Journal of Financial Economics, 103(1), 1-19.

[47]. Hutton, I., Jiang, D., & Kumar, A. (2014). Corporate policies of Republican managers. Journal of Financial and Quantitative analysis, 49(5-6), 1279-1310.

[48]. Oprean, C., & Tanasescu, C. (2014). Effects of behavioural finance on emerging capital markets. Procedia Economics and Finance, 15, 1710-1716.

[49]. Economou, F., Hassapis, C., & Philippas, N. (2018). Investors’ fear and herding in the stock market. Applied Economics, 50(34-35), 3654-3663.

[50]. Li, Z., Diao, X., & Wu, C. (2022). The influence of mobile trading on return dispersion and herding behavior. Pacific-Basin Finance Journal, 73, 101767.

[51]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[52]. Demirer, R., & Kutan, A. M. (2006). Does herding behavior exist in Chinese stock markets?. Journal of international Financial markets, institutions and money, 16(2), 123-142.

[53]. Choi, K. H., & Yoon, S. M. (2020). Investor sentiment and herding behavior in the Korean stock market. International Journal of Financial Studies, 8(2), 34.

[54]. Brendea, G., & Pop, F. (2019). Herding behavior and financing decisions in Romania. Managerial Finance.

[55]. Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128.

[56]. Benartzi, S., & Thaler, R. H. (2001). Naive diversification strategies in defined contribution saving plans. American economic review, 91(1), 79-98.

[57]. French, K. R., & Poterba, J. M. (1991). Investor diversification and international equity markets.

[58]. Lai, S., & Teo, M. (2008). Home-biased analysts in emerging markets. Journal of Financial and Quantitative Analysis, 43(3), 685-716.

[59]. Graham, J. R., Harvey, C. R., & Huang, H. (2009). Investor competence, trading frequency, and home bias. Management Science, 55(7), 1094-1106.

[60]. Kim, G. H., & Kim, H. (2022). Non-fundamental home bias in international equity markets. International Economics, 170, 213-234.

[61]. Lin, L., & Puchniak, D. W. (2022). Institutional Investors in China: Corporate Governance and Policy Channeling in the Market Within the State. Columbia Journal of Asian Law, 35(1), 74-159.

[62]. Chen, G. M., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2004). Behavior and performance of emerging market investors: Evidence from China. Unpublished Washington State University Working paper (January).

[63]. Lucey, B. M., & Dowling, M. (2013). Cultural behavioral finance in emerging markets. Emerging Markets and the Global Economy: A Handbook, 327.

[64]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.

[65]. Bateman, H., Eckert, C., Iskhakov, F., Louviere, J., Satchell, S., & Thorp, S. (2017). Default and naive diversification heuristics in annuity choice. Australian Journal of Management, 42(1), 32-57.

[66]. Bansal, T. (2020). Behavioral finance and COVID-19: cognitive errors that determine the financial future. Available at SSRN 3595749.

[67]. Indārs, E. R., Savin, A., & Lublóy, Á. (2019). Herding behaviour in an emerging market: Evidence from the Moscow Exchange. Emerging Markets Review, 38, 468-487.

[68]. Jiang, R., Wen, C., Zhang, R., & Cui, Y. (2022). Investor's herding behavior in Asian equity markets during COVID-19 period. Pacific-Basin Finance Journal, 73, 101771.

[69]. Ririn Stefani Silitonga, Isfenti Sadalia, Amlys Syahputra Silalahi. (2021). Analysis of Herding Behavior in Developing Countries. International Journal of Research and Review. Vol.8; Issue: 12

[70]. Hirshleifer, D. (2001). Investor psychology and asset pricing. Journal of Finance, 56, 1533-1597.

[71]. Thaler, R. H., Tversky, A., Kahneman, D., & Schwartz, A. (1997). The effect of myopia and loss aversion on risk taking: An experimental test. The quarterly journal of economics, 112(2), 647-661.

[72]. Tversky, A., & Kahneman, D. (1989). Rational choice and the framing of decisions. In Multiple criteria decision making and risk analysis using microcomputers (pp. 81-126). Springer, Berlin, Heidelberg.

[73]. Chaffai, M., & Medhioub, I. (2014). Behavioral finance: An empirical study of the Tunisian stock market. International Journal of Economics and Financial Issues, 4(3), 527-538.

[74]. Leković, M. (2020). Cognitive biases as an integral part of behavioral finance. Economic Themes, 58(1), 75-96.