Main Article Content

Tamara Armenteros-Ruiz
Universidade de Santiago de Compostela
Spain
https://orcid.org/0000-0003-2122-9835
Leandro Benito
Universidade de Santiago de Compostela
Spain
https://orcid.org/0000-0003-3624-1570
María-Celia López-Penabad
Universidade de Santiago de Compostela
Spain
https://orcid.org/0000-0001-8738-4366
Vol 32 No 1 (2023), Articles, pages 1-27
DOI: https://doi.org/10.15304/rge.32.1.8190
Submitted: 01-01-2022 Accepted: 28-07-2022 Published: 23-01-2023
Images.
Copyright How to Cite Most read articles by the same author(s) Cited by

Abstract

While classical financial theories assume the rationality of the individual, Behavioral Finance supports the influence of cognitive and emotional aspects on investment decisions. The objective of this study is to contribute in this field by analyzing the presence of five biases –Overconfidence, Herd Behavior, Player Fallacy, Hot Hand Fallacy, and Domestic Bias– and their relationship with the personal characteristics of the investor, in particular with his EFE. We also analyze the effect of the financial crisis derived from Covid-19 on the aforementioned biases. This work is based on 109 questionnaires carried out in Galicia to individual investors, both real and potential, operating in the stock markets. The results confirm the existence of such biases, their relationship with some personal characteristics, a lower presence in individuals with greater financial knowledge and the intensification of Overconfidence and Herd Behavior during prolonged crises.