The subjective anchoring effect on investors' decisions in Tehran Stock Exchange

Abstract

The decisions of investors in the stock market are influenced by various factors. One of the causes of behavior that causes investors to not react properly to the published information is the phenomenon of mental anchorage.Due to the fact that there is no correct information about the phenomenon of anchoring in the Iranian stock market and its relationship with accounting information. This study aims at investigating the effect of subjective anchoring on investors' decisions in Tehran Stock Exchange.. The statistical population of this research consisted of companies listed at Tehran Stock Exchange in a period from 2010 to 2019. And the statistical sample includes 128 companies. The hypotheses of this research were tested by data panel method. According to the results of this research, investors follow subjective anchoring phenomenon during decision making based on the expected profit of management by making a comparison between this profit and the average predicted profit of the industry, while real investors are further affected by subjective anchoring phenomenon compared to institutional investors. In addition, the investors are not affected by subjective anchoring phenomenon by making a comparison between the expected profit of management and the average profit for the last three years of the company. In general, it can be said that investors in the Tehran Stock Exchange are affected by the phenomenon of mental anchor.

Keywords

• subjective anchoring"
• " investors reaction"
• " information uncertainty"
• " behavioral financial"