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Mediating Role of Behavioral Biases between Emotional Intelligence and Financial Decision Making: A Conceptual Framework

Journal: International Journal of Mechanical and Production Engineering Research and Development (IJMPERD ) (Vol.10, No. 3)

Publication Date:

Authors : ; ;

Page : 13019-13026

Keywords : Emotional Intelligence; Behavioral Biases; Stock Preference and Risk Preference;

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Stock market Participation and risk preferences are the two most crucial aspects of personal financial decision making of the investors. Several studies have indicated that emotional intelligence affects the investors ' behavioral biases, stock preferences, and risk tolerance. However, researchers have not found any study exploring the underlying path through which emotional intelligence is related to stock market participation. Consequently, a mediational study was carried out to examine whether behavioral biases and risk preferences function as a connection between investors' emotional intelligence and stock preference. The results of the study showed that people with low emotional intelligence show less stock market participation and prefer fewer risks in their financial decisions than people with high emotional intelligence. Moreover, risk preferences and also behavioral biases such as loss aversion, regret and also risk preferences were found to be mediators the effect of emotional intelligence on stock market participation of the investors

Last modified: 2020-10-01 15:01:33