Identification of Behavioral Biases Affecting the Decisions of Individual Investors Dealing the Shares in Hamadan Stock Exchange

The purpose of this study was to identify behavioral biases affecting shares dealing decisions of individual investors on Hamadan Stock Exchange in 2011. The research literature contains behavioral finance, financial rationality, the main dispute of financial standards, behavioral finance and investor behavioral biases. The methodology is practical and the data will be collected descriptively. In this research, by the use of Morgan Table, 80 shareholders are selected randomly as a sample and the data required collected by a questionnaire made by the researcher. In order to test the hypotheses, one-sample T test is used for normal variables, two-sentence test for abnormal variables and Friedman test for ranking behavioral inclination of the shareholders. The main question is whether the behavioral inclination will affect the shares dealings decisions making of individual investors. The findings of this research indicate that the behavioral inclination affects the shares dealings decisions making of individual investors. They also represent that, when dealing the shares, the shareholders will be engaged in representative inclination, anchoring, excessive reaction, too much confidence, following others, paying too much attentions to the gossips and finally less than usual reaction respectively.