Presenting a portfolio selection model based on agency theory

The financial perspective of behavior, which is a combination of psychology and finance, states that psychology plays a role in financial decision-making. Accordingly, the purpose of the present study is to present a portfolio selection model with a financial-behavioral perspective of company managers based on agency theory. The present study was conducted in two steps. In the first step, the dimensions of the components of behavioral financial theories based on the theory of representation, the relationships between these variables are explained in the form of a mathematical model. The calculations of this section have been done by Mathematica software. In the second step, using the price index data and cash return of Tehran Stock Exchange for quarterly periods over a period of 10 years from the beginning of 1389 to the end of 1398 to test the proposed behavioral financial model with the theory of representation in the portfolio Optimization and comparison with the classic model are discussed. The analysis of the second step was performed by means of comparison of means with SPSS software. The results of the analysis of two standard and behavioral models in the present study showed that the behavioral model led to the achievement of a portfolio with less risk and the returns of the portfolios are not significantly different.