Studying the Relationship between Behavioral Biases of Investors and Their Investment Decisions in Tehran Stock Exchange

The main purpose of this study is investigating the relationship between some behavioral biases such as self control and optimism، self-attribution، illusion of control، conservatism and ambiguity aversion with investing decisions of Tehran Stock Exchange’s investors; thus، when faced with these kinds of biases، investors may not be misled. The statistical population included all investors (shareholders) of Tehran Stock Exchange as real entities for the period of 2010 to 2012. The research sample was estimated using Cochran formula to include 384 people. Then، a questionnaire was designed and given to them to fill it out. Subsequently، hypotheses were tested using structural equation modeling (SEM) and Pearson correlation. Findings show that the elusion has a significant relationship with investors'' investing decisions. Also the result indicate there is a significant relationship between self control and optimism، self-attribution، illusion of control and conservatism biases and investors'' decision making process at Tehran Stock Exchange; meanwhile ambiguity aversion has shown no significant and positive impact on investors'' investing decisions.