ROLE OF GAME THEORY IN STOCK’S INVESTMENT: HAVING LOSS-AVERSION BIAS DURING THE STRESSED CONDITION

Muhammad Awais
Abstract:
The aim of this study is to provide an understanding regarding the investor’s situation of loss-aversion and stress during investment decisions in stock market, and the use of various mathematical models (game theories) to eliminate those situations. The objectives of this study are to know about the irrationalities in investor’s behavior in stock market, due to stress and loss-averse behavior of investors, and find-out the ways to deal with these behaviors. Qualitative research style used to gather data from the participants of the study. Semi-structured interviews designed to know about the experience and thoughts of each respondent in detail. A sample of 16 experienced stock marketers from Pakistan and USA selected for this study. The study found the specific kind of tensed and biased investor’s behaviors in the market, and found their solutions. This study obviously highpoints the ways to deal with stress and loss-averse behavior through mathematical analysis and some other suggestions.
research from:
Year:
2021
Type of Publication:
Article
Keywords:
game theory; investment
Journal:
International Journal of Management
Volume:
12
Number:
3
Month:
march

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