The psychology of investing: Stock market recommendations and their impact on investors’ decisions (the example of the Polish stock market)

Jakub Keller; Radoslaw Pastusiak

doi:10.1556/032.2016.66.3.3

Acta Oeconomica

Volume/Issue:: Volume 66: Issue 3

The psychology of investing: Stock market recommendations and their impact on investors’ decisions (the example of the Polish stock market)

Authors:

Jakub Keller

Jakub Keller Department of Corporate Finance, University of Lodz, Lodz, Poland. E-mail: keller.jakub@wp.plE-mail: rpastusiak@uni.lodz.pl

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and

Radoslaw Pastusiak

Radoslaw Pastusiak Department of Corporate Finance, University of Lodz, Lodz, Poland. E-mail: keller.jakub@wp.plE-mail: rpastusiak@uni.lodz.pl

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Pages:: 419–437

Online Publication Date:: Sep 2016

Publication Date:: 01 Sep 2016

Article Category:: Journal Article

DOI:: https://doi.org/10.1556/032.2016.66.3.3

Keywords:: capital market; behavioural finance; behavioural biases; heuristics; trading; investments; Warsaw Stock Exchange; G01; G11; G23

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This study seeks to show the impact of stock recommendation reports on the efficiency of investments in the Polish stock market. The study is carried out in two stages: the first takes place at the micro-level and is based on a behavioural experiment, while the second focuses on the verification of our results obtained on a real market. The main assertion is that stock recommendations create heuristic effects among investors near the publication date of the recommendation. The ambiguity of the recommendations hinders investors’ reliable and unequivocal evaluation in investment decisions. There are studies in this field for different stock markets and periods of time, but our research added significant new knowledge about the functioning of the Polish stock exchange. Our study fits into the mainstream analysis of outlining the behaviour of investors in the capital market. The research findings underpin our pessimism about the impact of stock recommendations on investors’ behaviour.

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Acta Oeconomica Periodical of the Hungarian Academy of Sciences

Print ISSN:: 0001-6373

Online ISSN:: 1588-2659

Associate Editors

Péter Benczúr, Joint Joint Research Center, European Commission
Dóra Benedek, International Monetary Fund
Balázs Égert, OECD
Dániel Prinz, World Bank
Rok Spruk, University of Ljubljana, School of Economics and Business, Slovenia

Editorial Board

Anders Åslund, Georgetown University and Advisory Council of CASE, USA
István Benczes, Corvinus University of Budapest, Hungary
Agnieszka Chłoń-Domińczak, SGH Warsaw School of Economics, Poland
Fabrizio Coricelli, University of Siena, Italy
László Csaba, Corvinus University of Budapest, Hungary and Central European University, Austria
Beáta Farkas, Faculty of Economics and Business Administration, University of Szeged, Hungary
Péter Halmai, Budapest University of Technology and Economics, and National University of Public Service, Hungary
Martin Kahanec, Central European University, Austria
Michael Landesmann, The Vienna Institute for International Economic Studies (WIIW), Austria
Péter Mihályi, Corvinus University of Budapest, Hungary
Debora Revoltella, European Investment Bank

Corvinus University of Budapest
Department of Economics
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E-mail: judit.kalman@uni-corvinus.hu

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Acta Oeconomica
Language	English
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