Designing a Model of Misbehavior due to Customers' Mental Biases in the Financial Industry: Bank and Stock Market Customers

Human behavior and decision-making processes have been the subject of studies by many researchers, especially in the field of marketing. Basically, the purpose of such studies is to identify the impact of psychological, behavioral, and cognitive aspects in decision making. In the framework of this view, a theoretical scientific framework was created that shows behavioral economics, which briefly aims to integrate psychological aspects in the decision-making process of economic and financial affairs. According to this study, the research conducted in this field aims to investigate the way people make decisions and how they interact or influence other people, organizations, markets, and society. On the other hand, the investment decision-making process (investor behavior) is influenced by various behavioral biases that deviate investors from rationality and cause irrational and illogical decisions. In fact, this field focuses on the behavior of investors and their decision-making process. Overconfidence, herding, anchoring, cognitive dissonance, availability bias, self-attribution, mental accounting, framing, and representative bias are a few of the biases that have a major impact on people's investment decisions.The main goal of the current research is to identify and investigate the misbehavior of customers as a result of mental biases affecting them in the field of investment (in the bank and stock market), which, based on existing studies and the reality of the capital market, is of great importance in the country’s economic development. This research has been done using a mixed-methods approach (qualitative and quantitative). In the qualitative part, the research community includes experts (including professors and researchers in the field of customer behavior and behavioral economics, as well as managers and executive experts with membership in high levels of banking and stock exchange organizations) and informed customers (familiar with various investment methods and having at least 5 years of investment activity). Sampling has been done in a purposeful or judgmental way (using people who have sufficient expertise and necessary information in the field of research) with 17 people. Also, the theme analysis approach has been used to analyze and systematically code qualitative data and develop themes. The data collection method in this section is semi-structured in-depth interviews (to discover and confirm the final components and their relationships). The content validity ratio of CVR has been also measured for interview questions by using the opinions of 10 experts. According to Lawshes’ opinion, after modifying, deleting, or merging questions with lower than acceptable CVR, the calculated CVR for the final questions of the questionnaire was larger than or equal to 0.65 (higher than 0.62). For measuring the reliability of the interviews Cohen's kappa coefficient and formula were also used, which was measured at 0.55 in this research, according to the guide table of Landis and Koch’s was considered higher than average. In the quantitative part of the research, the statistical population is all clients of investment services of Tehran’s Banks and Stock Exchange, and a sample of 384 people (based on Cochran's formula for unlimited societies) has been examined (351 people electronically and 33 people by paper and telephone for access to the desired sample were questioned). The method used for data analysis and model testing in this section is structural equation modeling, which was modeled and implemented using Amos software. The data collection tool was a 30-question Likert scale questionnaire. In order to confirm the construct validity, Bartlett's level of significance must be less than 5 percent, which in this study ‘zero’ is confirmed. The sampling adequacy statistic is 0.685. It should be noted that the reliability of the entire questionnaire was acceptable with a rate of 0.894, but the anchoring component was removed from the analysis due to an alpha of 0.6 (lower than 0.7).The final result of the current research indicates the existence of 3 categories of mental biases among customers of the financial services industry, and a new group of factors called ‘value or belief biases’ was discovered and investigated for the first time in this research. In general, in this research, in addition to identifying 5 types of misbehavior among customers, all mental biases of financial service customers (stock market and bank) were categorized into three groups: judgmental or cognitive biases, sensory or preference biases, and value or belief biases.