A Model for Explaining Investors' Financial Behaviors Based in Environmental Activities Based on Perceptions of Stock Portfolio Returns and Psychological Mechanisms in Tehran Stock Exchange

Behavioral finance refers to how people make decisions under uncertainty conditions. The purpose of this study is to present a model for explaining financial behaviors of investors in Tehran Stock Exchange in the form of identifying influential behavioral factors and validating behavioral model. Data from the interviews are analyzed using content analysis method, resulting in the identification of 22 components grouped under 6 categories, according to which the questionnaire is designed. At this stage, the survey strategy is conducted, and then 300 questionnaires are distributed as available sampling method and 287 completed questionnaires are collected. Validity and reliability indicators show the high credit of the questionnaire. The results of this study indicate that cognitive biases are former than emotional biases, which besides the cultural influences and personality form investor’s decision making that lead to herding behavior. Results derived from questionnaires have been analyzed using descriptive and deductive statistics method (Structural Equation Modeling) and SPSS and AMOS software. Results from the study show that all behavioral biases directly and significantly influence the decision making of investors.