An empirical study of individual investors’ behavioral biases in the Vietnamese stock market

Abstract

The study aims to determine individual investors’ behavioral biases at individual level in the Vietnamese stock market and investigate the relationships between mutual behavioral biases, between demographic variables and behavioral biases, between stock investment variables and behavioral biases. This is a quantitative research in behavioral finance with the survey conducted in forms of questionnaire. Each question is a problem which requires investors to make decision. The research finds out that there are specific behavioral biases which influence investors’ investment decisions. Furthermore, there are relationships between gender and illusion of control bias, gender and optimism bias, gender and self-control bias. We also realize relationships between average value per trading times and investment experience, average value per trading times and loss aversion bias, trading frequency and optimism bias, investment experience and optimism bias, monthly income and optimism, age and cognitive dissonance bias. Our findings confirm relationships between mutual behavioral biases mentioned in behavioral finance such as relationships between framing bias and mental accounting bias, illusion of control bias and overconfidence bias. Additionally, we find out relationships between ambiguity aversion bias and confirmation bias.