This article explores the relation between individual well-being, risky decision-making, susceptibility to cognitive biases and investor beliefs about investing. A survey of one hundred and two individuals revealed that those with higher satisfaction with life are more prone to taking risks. In a loss frame, participants who were most likely to take a gamble had higher levels of psychological, social and overall well-being. Lower levels of satisfaction with life were found to impact the susceptibility of the reflection effect cognitive bias. In addition to this, well-being was found to be associated with investment beliefs, particularly those concerning diversification, the need to be alert and active, and the risk/return trade-off.
- Risk taking
- Cognitive biases
- Positive psychology
Moulang, C., & Strydom, M. (2018). Does well-being impact individuals’ risky decisions and susceptibility to cognitive bias? Accounting and Finance, 58(S1), 493-527. https://doi.org/10.1111/acfi.12339