Perceptional Errors: Personality and Moderating Role of Age and Gender in Stock Exchanges

Abstract

One of the important factors in stock exchanges is investors' personality. The aim of this study is to identify the common perceptual errors among investors and its relation with their personality considering moderating role of their age and gender. For this purpose, a sample of 200 investors in Tehran's stock market was determined. The data of study were collected using a questionnaire. Then, according to the model, we tried to test hypotheses applying Pearson's linear correlation coefficient. Results show that there is a meaningful relation between perceptual errors and investors' personality. However, considering moderating variables, there is only significant relation between the two dimensions of conscientiousness and openness of personality given investors' gender and perceptual errors. I. Introduction: Most financial theories are based on the assumption that investors are logically concerned about increasing their investment and compare investment risk and return. Therefore, they tend to invest in areas which contain high expected returns and lower risks. It seems the assumption of investors' bounded rationality, i.e., they are always seeking to maximize the utility, is not enough to justify the investment behavior and market reaction. There is evidence that show a lot of behavioral finance patterns are rooted in human existential dimensions and are effective on individual decisions. The level of investment risk that investors are willing to tolerate depends on the psychological characteristics. Besides, investors' decisions may be affected by behavioral factors and perceptual allusions. Financial behavioral sciences are mainly concerned with how investors normally behave and how they should behave. They attempt to explain what happens in the capital markets and provide justifiable explanations for investors' as well as financial market behaviors. For this purpose, these sciences use psychology and introduce psychological factors into the financial theories and models. The present article follows these lines of thinking. II. The statement of problem: For a relatively long time, most researchers in financial field mainly supposed that investors possess