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The Impact of Financial Literacy on Cognitive Biases of Individual Investors

Ercan Özen
Gürsel Ersoy

Contemporary Issues in Behavioral Finance

ISBN: 978-1-78769-882-6, eISBN: 978-1-78769-881-9

ISSN: 1569-3759

Publication date: 4 July 2019

Abstract

Findings – In the results of study (1) it was determined that financial literacy leads to differences in cognitive biases; and (2) cognitive biases of individuals who do not receive finance education are different from individuals who receive finance education and professionals in the business world. The findings indicate that the increase in the level of financial literacy of individuals will reduce the cognitive biases and heuristics, and therefore will have a positive effect on the investor behavior in financial markets.

Keywords

  • Behavioral finance
  • Financial education
  • Investor psychology
  • Cognitive bias
  • Heuristics
  • Investor types

Citation

Özen, E. and Ersoy, G. (2019), "The Impact of Financial Literacy on Cognitive Biases of Individual Investors", Grima, S., Özen, E., Boz, H., Spiteri, J. and Thalassinos, E. (Ed.) Contemporary Issues in Behavioral Finance (Contemporary Studies in Economic and Financial Analysis, Vol. 101), Emerald Publishing Limited, pp. 77-95. https://doi.org/10.1108/S1569-375920190000101007

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Emerald Publishing Limited

Copyright © 2019 Emerald Publishing Limited

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