Modeling the Decision Making of Investors with Financial Intelligence Based on Behavioral Biases Using the Grounded Method

This study aims to present a comprehensive and practical model for decision-making by financially intelligent investors based on behavioral biases (cognitive and emotional) in the Iranian capital market. To achieve this goal, various aspects of this topic have been examined from different perspectives. In the field of decision-making by financially intelligent investors, most research has been quantitative, with only a limited number of qualitative studies focusing solely on financial intelligence. This qualitative study investigates both financial intelligence and behavioral biases. Using grounded theory, the impact of behavioral biases on the decision-making of financially intelligent investors for stock selection in the Iranian stock market was modeled. To more precisely examine each parameter of this study (financial intelligence and behavioral biases), the researcher conducted all interviews separately in two distinct stages, once for the financial intelligence parameter and once for the behavioral biases parameter, performing open and axial coding. Finally, using selective coding, all extracted categories of both mentioned parameters led to the formation of the paradigm model of decision-making by financially intelligent investors. This modeling can help better understand investor behavior and improve their financial decision-making. The present study helps financially intelligent investors gain a better understanding of the impact of behavioral biases on their decision-making and, as a result, increase their investment returns by making optimal decisions.