Evaluation and Classification of Behavioral Biases According to Thinking Styles, Risky Investment Intention, and Subjective Financial Literacy

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Aren S., Hamamcı H.

Istanbul business research, vol.52, no.1, pp.133-160, 2023 (Peer-Reviewed Journal) identifier

  • Publication Type: Article / Article
  • Volume: 52 Issue: 1
  • Publication Date: 2023
  • Doi Number: 10.26650/ibr.2023.52.961368
  • Journal Name: Istanbul business research
  • Journal Indexes: TR DİZİN (ULAKBİM)
  • Page Numbers: pp.133-160
  • Yıldız Technical University Affiliated: Yes


The main purpose of this study is to classify the 20 biases into different groups (factors) and estimate each of them according to the variables of rational, experiential-affective, risky investment intention, and financial literacy. Behavioral finance, which combines the concepts and approaches of psychology with the theory of finance, evaluates individuals’ deviations from rational choices in their financial decisions with the concept of biases. In this context, the data were collected from 1188 subjects in Turkey through online surveys using a convenience sampling method between 14 May - 28 June 2020. Participants were gender-balanced, young, single, and highly educated. An exploratory factor analysis, ANOVA, an independent sample T-test, and a correlation analysis were performed using SPSS. In addition, a confirmatory factor analysis was performed using structural equation modeling. According to the results, these 20 biases were grouped into four groups according to the variables of thinking style, risky investment intention, and subjective financial literacy level. It was determined how both these four groups and individual biases differ according to thinking styles, risky investment intention and their levels of subjective financial literacy. In addition, it was also investigated whether both bias groups and other variables differed according to four demographic variables.