Abstract
Purpose: The purpose of this study is to determine the economic effects caused by the crisis impact of the COVID-19 pandemic. Methodology: We explored various kinds of literature from various journals to find out the level of trust and financial behavior of the public during the COVID-19 pandemic. Results and findings: The phenomena that occurred during the crisis due to the COVID-19 pandemic, such as excessive volatility and the confidence of unaffected financial institutions, cannot be explained through the traditional market paradigm. In this paper, we explore this phenomenon from a behavioral finance perspective and discuss some relevant cognitive errors and biases during and after the crisis due to the COVID-19 pandemic. Limitation: The study explains by exploring the phenomenon from the viewpoint of financial behavior and discussing some of the relevant cognitive errors during and after the crisis. We only look at each phenomenon from a psychological point of view and consider its relevance to financial institutions and markets as well as the financial crisis due to the COVID-19 Pandemic.
Highlights
The SARS-CoV-2 virus or better known as Coronavirus or COVID-19, which has attacked various parts of the world, has produced dramatic economic effects, marked by excessive volatility in stock prices and falling markets (Bansal, 2020)
We explore this phenomenon from a behavioral finance perspective and discuss some relevant cognitive errors and biases during and after the crisis due to the COVID-19 pandemic
This paper examines some of the common cognitive biases and some of the related phenomena in behavioral finance as observed in the COVID-19 pandemic impacting the current global crisis
Summary
The SARS-CoV-2 virus or better known as Coronavirus or COVID-19, which has attacked various parts of the world, has produced dramatic economic effects, marked by excessive volatility in stock prices and falling markets (Bansal, 2020). Reports in the theory of efficient traditional markets appear inappropriate if they are not presented with significant evidence against the theory so that markets and humans are most logical and master efficient self-management and fail to portray dramatic volatility (Shiller, 2003). This volatility can be described by the behavioral finance paradigm (Olsen, 1998). This paper examines some of the common cognitive biases and some of the related phenomena in behavioral finance as observed in the COVID-19 pandemic impacting the current global crisis
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
