Relying on the Heuristic of Trust: A Case Study

25 Pages Posted: 10 Apr 2019

See all articles by Aaron Bruhn

Aaron Bruhn

Australian National University (ANU) - Research School of Finance, Actuarial Studies and Applied Statistics; Financial Research Network (FIRN)

Date Written: April 2019

Abstract

This study examines the reliance on trust as a heuristic by individuals when making personal financial decisions, using a qualitative case study. We show that in the face of complexity and choice, individual investors predominantly resorted to the heuristic of trust to make financial decisions. This demonstrates the need for industry and public policy‐makers to be aware that individuals can and will resort to simplified heuristics as a basis for financial decision‐making, particularly within an environment where substantial complexity and choice exist.

Keywords: Behavioural finance, Financial planning, Heuristics, Personal finance, Trust

Suggested Citation

Bruhn, Aaron, Relying on the Heuristic of Trust: A Case Study (April 2019). Accounting & Finance, Vol. 59, pp. 333-357, 2019. Available at SSRN: https://ssrn.com/abstract=3369147 or http://dx.doi.org/10.1111/acfi.12346

Aaron Bruhn (Contact Author)

Australian National University (ANU) - Research School of Finance, Actuarial Studies and Applied Statistics ( email )

Kingsley Street
Canberra, ACT 2601
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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