Group Behaviour Affects Financial Decisions

Abstract

This work presents a new approach to behavioral finance with a conceptual contribution by suggesting and discussing with examples a list of group behavioral biases, bringing, hence, an additional outlook on how behavioral biases affect financial decisions. While individual behavioral biases are detected in individuals acting alone, group behavioral biases require the scrutiny of group behavior. Thus, a conceptual contribution of this paper, which may be particularly relevant for institutional investors, is to explain with examples - after research and experience - which are the group behavioral biases and their impact upon financial decisions.

Keywords: behavioral finance, decision-making, investment, portfolio management, communication, institutional investors.

JEL Classification: G02, G11, G14