Behavioral Finance: The Aversion to Uncertainty Bias in Individual Financial Decisions

8 Pages Posted: 4 Feb 2015

See all articles by Jose L. B. Fernandes

Jose L. B. Fernandes

Universidade de Brasília

Taynara Fernandes

Catholic University of Brazil (UCB)

Alberto S. Matsumoto

Universidade Católica de Brasília; Government of the Federative Republic of Brazil - Central Bank of Brazil

Paulo César Chagas

Catholic University of Brazil (UCB)

Date Written: January 18, 2015

Abstract

This research verifies the existence of the aversion to uncertainty bias in individual financial decisions. It also evaluates the effects of gender and knowledge in this bias. We considered a sample of 80 undergraduate management students from Universidade Católica de Brasília. The results supported the existence of the uncertainty bias amongst individuals facing financial decisions. Contrasting previous studies, men presented greater uncertainty bias than women. The students with higher financial knowledge presented lesser uncertainty bias when compared to the ones with reduced knowledge. This last result supports the classification of the aversion to uncertainty as cognitive and not emotional bias.

Keywords: Uncertainty Bias, Gender Effect, Behavior Finance

JEL Classification: C90, D12

Suggested Citation

Fernandes, Jose Luiz Barros and Fernandes, Taynara and Matsumoto, Alberto S. and Chagas, Paulo César, Behavioral Finance: The Aversion to Uncertainty Bias in Individual Financial Decisions (January 18, 2015). Available at SSRN: https://ssrn.com/abstract=2551582 or http://dx.doi.org/10.2139/ssrn.2551582

Jose Luiz Barros Fernandes (Contact Author)

Universidade de Brasília ( email )

Campus Universitário Darcy Ribeiro
Brasília, Distrito Federal 70910-900
Brazil

Taynara Fernandes

Catholic University of Brazil (UCB) ( email )

SGAN 916, Modulo B, Asa Norte
Brasília, DF 70790-160
Brazil

Alberto S. Matsumoto

Universidade Católica de Brasília ( email )

SGAN 916, módulo B, Asa Norte
Brasília, Brasília 70790-160
Brazil
556181618192 (Phone)

Government of the Federative Republic of Brazil - Central Bank of Brazil ( email )

P.O. Box 08670
SBS Quadra 3 Bloco B - Edificio-Sede
Brasilia, Distr. Federal 70074-900
Brazil

Paulo César Chagas

Catholic University of Brazil (UCB) ( email )

SGAN 916, Modulo B, Asa Norte
Brasília, DF 70790-160
Brazil

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