A STUDY OF THE INFLUENCE OF SOCIO-DEMOGRAPHIC CHARACTERISTICS AND OVERCONFIDENCE ON DECISIONS OF INVESTORS, ANALYSTS AND INVESTMENT PROFESSIONALS FROM THE BEHAVIORAL FINANCE POINT OF VIEW

Abstract

Behavioral Finance is a new field of study that counteracts the assumption of the rationality on the partof decision makers, which is adopted by modern finance. One of the aspects of studies in behavioral financeis to identify how emotions and cognitive failures may influence the decision making process ofindividuals. In  this context, this study aims to ascertain whether the decisions of investors, analysts andinvestment professionals are influenced by a bias of overconfidence and the socio-demographiccharacteristics of these individuals. As a methodology, it was decided to conduct a study with a descriptivequantitative and qualitative approach. Therefore a field survey was carried to out to collect data with anonline questionnaire. The method of sampling by judgment was applied, which is characterized by the nonprobabilistic collection of samples from individuals registered with the Association of Investment Analystsand Professionals of the Capital Market in Minas Gerais (APIMEC-MG), as well as individuals registeredwith TBC Investments. This group consisted of 810 individuals who provided 398 valid questionnaires. Datawas analyzed by using the estimation methods of Two-Stage Least Squares (2SLS) and Ordinary LeastSquares (OLS), with correction for finite population and the results were compared. They showed thatdi erences of opinion, style and perception of the reality, motivated by personal and investmentcharacteristics and the susceptibility to the bias of the overconfidence of the agents, exert a significantimpact on decision making.