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The purpose of this research is to examine the effect of heuristic biases on investment decisions through multiple mediation mechanisms of risk tolerance and financial literacy in the Tanzanian stock market.

A sample of 316 individual investors in the Tanzanian stock market was obtained through questionnaires. The data were analyzed using structural equation modeling (SEM).

The findings show that financial literacy mediates insignificantly the effects of overconfidence, availability, anchoring and representativeness heuristics on investment decisions. Further, financial literacy does not influence the effect of risk tolerance and investment decisions. Risk tolerance is confirmed as a positive mediator of overconfidence, availability, anchoring and representativeness heuristics in investment decisions. Also, the study shows that overconfidence exerts a stronger influence on investment decisions, followed by availability, representativeness, risk tolerance, anchoring and financial literacy.

The study deals with real investors. Therefore, it uses fewer items to measure the constructs in order to avoid respondent bias. Further research could examine the effects of heuristic biases on investment decisions by adding or modifying the items of particular constructs and studying institutional investors.

The findings can help individual investors to analyze and evaluate their behavior toward stock selection. Securities institutions can use this research to understand investors' behavior, evaluate future market trends and provide advice to the investors.

Previous studies have examined the impact of heuristics on the investment decisions of individual investors. The unique empirical analysis developed in this paper is that it examines the multiple mediation mechanisms of risk tolerance and financial literacy with respect to heuristic biases and investment decisions in the Tanzanian stock market.

This paper aims to explore the role of heuristics in the reassessment of relationship events and how it influences perceptions of commitment, fairness and relationship value. It answers the question of how heuristics interrelate with decision-makers’ evolving interpretations of commitment, fairness and relationship value in a specific buyer-supplier relationship.

This paper presents data from a longitudinal study of an evolving buyer–supplier relationship involving a multinational supplier of fast-moving consumer goods and a medium-sized and highly specialized supplier. It analyzes qualitative data about the use of heuristics in buyer–supplier relationships, and it is based on evidence collected from interviews, presentations, meetings and secondary data.

This paper shows that a buyer’s unexpected behavior can lead to a reassessment of commitment, fairness and relationship value. Heuristics can delay relationship reassessments, however. The case shows that heuristics have a preserving quality and that the effect of transformative events only slowly changes the perception of the value of the relationship. In this change process, the link between commitment, perceived fairness and heuristics is crucial.

This paper contributes to research on the relationship between buyer–supplier relationships and heuristics. In particular, the paper contributes to the understanding of how relational events in a buyer-supplier relationship change the commitment and perception of fairness, and how heuristics change accordingly. On a more overarching level, the study contributes to our understanding of business relationship dynamics.

As consumer debt can substantially impair subjective well-being, it is crucial for research to gain insights into how consumers can be motivated to improve financial planning. This paper aims to investigate how frontline employees in financial services can help consumers regulate their financial planning behaviors and how financial service providers can effectively support their frontline employees in this effort through leadership and organizational climate.

We incorporate regulatory focus theory and conservation of resource theory to develop a conceptual model that we test in a triadic study with a unique dataset collected from consumers, frontline employees, and managers in the banking sector.

We find that frontline employees must pay attention to the details of consumers’ needs and customize the service to those needs to trigger consumer promotion focus and stimulate consumers’ financial planning behaviors. Moreover, our results emphasize that the organization must act as an integrated entity. Thus, a manager’s servant leadership and an organizational climate of customer stewardship are crucial for frontline employees to transform consumers’ financial planning behaviors.

The study highlights frontline employees’ key role in motivating consumer financial planning behavior, offering a new perspective in transformative service research on enhancing financial well-being.

The findings provide financial service providers with actionable implications for enhancing consumers’ financial planning. This benefits both consumers and financial institutions, as customers with greater spending power can buy more financial products.

This study advances transformative service research on consumer financial planning behavior, which has largely focused on consumer-related or society-level variables, by exploring the role of frontline employees and organizational support in terms of leadership and climate.

The transition to a circular economy (CE) is a known concern in the context of the textile industry, in which business actors attempt to facilitate circular activities such as textile recycling. However, a lack of established business relationships and networks creates uncertainty for textile circulation. In such business environments, managerial decisions regarding CE may depend not only on normative behaviour but also on heuristics that guide their choices. Since business relationships for textile circularity require interactions between business actors, this study explores how managerial heuristics are shaped in the CE transition within the textile industry and their impact on actors’ interactions within business relationships and networks.

Empirically, this qualitative study is based on interviews with managers representing companies and organisations engaged in business relationships and networks aimed at a CE transition in the textile industry, as well as on publicly available secondary data.

The findings indicate that managerial decisions promoting circularity can be influenced by, besides normative information assessment, factors predominant in (1) the business and regulatory environment, (2) managers’ experience and knowledge obtained during interactions within business networks and (3) the internal strategic approaches of business organisations. This study identifies adaptation, experience, interaction and strategy heuristics that may be utilised by managers in making decisions in the context of uncertainty, such as the industrial transition to a CE.

This study expands the knowledge of heuristics applied to managerial decision making in interacting business firms and institutional organisations aiming to facilitate textile recycling and proposes a heuristics toolbox. The study provides an insight into business actors’ interactions, as well as various factors inside and outside the organisations shaping the managerial decisions. By doing this, the study adds to the literature, highlighting the importance of contextualisation and the interrelation between the individual and business environment levels in business-to-business management.

The purpose of this paper is to explore two financial inclusion measures adopted within the local welfare context of the city of Milan, Italy, examining their functioning and underpinning representations. The aim is also to understand how such representations take concrete shape in the practices of local actors, and their implications for the opportunities and constraints regarding individuals' effective inclusion. To this end, this paper takes a wide-ranging look at the interplay between the rise of financial inclusion and the individualisation and responsibilisation models informing welfare policies, within the broader context of financialisation processes overall.

This paper draws on the sociology of public action approach and provides a qualitative analysis of two case studies, a social microcredit service and a financial education programme, based on direct observation and semi-structured interviews conducted with key policy actors.

This paper sheds light on the rationale behind two financial inclusion services and illustrates how the instruments involved incorporate and tend to reproduce, individualising logics that reduce the problem of financial exclusion, and the social and economic vulnerability which underlies it, to a matter of personal responsibility, thus fuelling depoliticising tendencies in public action. It also discusses the contradictions underlying financial inclusion instruments, showing how local actors negotiate views and strategies on the problems to be addressed.

The paper makes an original contribution to the field of sociology and social policy by focusing on two under-researched instruments of financial inclusion and improving understanding of the finance-welfare state nexus and of the contradictions underpinning attempts at financial inclusion of the most vulnerable.

The aim of this research is to investigate the relationship between (dual) organizational identity and individual heuristics – simple rules and biases – in the process of strategy change. This paper offers a theory on identity reflexivity as a cognitive mechanism of strategy change in the context of organizational hybridity.

The authors draw on a 2-year ethnographic study at a Dutch social housing association dealing with the process of strategy change. The empirical data comprises of in-depth semi-structured interviews, ethnographic observations as well as secondary sources.

Conflicting identities at the organizational level influence heuristics at the individual level, since members tend to identify with their department's identity. Despite conflicting interpretations, paths of cognitive shortcuts – that the authors define as internal and external identity reflexivity – are shared by the conflicting identities.

The findings of this research are subject to limitations typical of a qualitative case-study, such as possibly being context dependent. The authors argue that this research contributes to the understanding of how individual heuristics relate to organizational heuristics, and suggest that the process of identity reflexivity can contribute to the alignment of conflicting identities enabling strategy formation in the context of a dual-identity organization.

Understanding how managers with conflicting identities achieve agreements is important to help organizational leaders to pursue sustainability-oriented strategy change.

Given the pressure experienced by mission-driven organizations to integrate multiple sustainability demands in their mission, understanding managers' decision-making mechanism when adapting to new, often conflicting, sustainability demands is important to accelerate societal sustainability transitions.

This paper addresses the process of new strategy design in the context of a socially driven business. This context fundamentally differs from the one addressed by the existing heuristics literature with respect to organizational environment and role, and specific competing demands.

Financial literacy is a crucial element of financial decision-making, exerting significant influence on the behaviour of individual investors, while making budgetary, house financing, stock investing and retirement planning decisions. So, the purpose of this research is to determine the relationship between financial literacy and behavioural biases of individual investors in Pakistan.

In this research paper, a sample of 300 observations was obtained through questionnaires from individual investors residing in Lahore and invested in Pakistan Stock Exchange. The data obtained, was passed through Cronbach’s Alpha and Exploratory Factor Analysis (EFA). The hypothesis developed for the research was tested by Pearson’s Chi-square and Ordinal Regression Analysis.

The hypothesis testing of the research concluded that there is a negative association between financial literacy and behavioural biases of individual investors. So, it means; with an increase in level of financial literacy, the likelihood of investor facing behavioural biases reduces. It also appeared that male respondents have more financial literacy than female respondents

Previous studies in the field of finance, identified different factors causing the financial behaviour of individual investor of Pakistan, and also focused on level of financial literacy in Pakistan, but these studies have not emphasized the crucial relationship between financial literacy and behavioural biases of individual investors. Thus, the unique empirical analysis developed in this paper has accentuated the financial literacy as a factor that mitigates behavioural biases of individual investor.

This paper aims to develop a conceptual framework on how the representativeness heuristic operates in the decision-making process. Specifically, the authors unbundle representativeness into its building blocks: search rule, stopping rule and decision rule. Furthermore, the focus is placed on how individual-level cognitive and behavioral factors, namely experience, intuition and overconfidence, affect the functioning of this heuristic.

From a theoretical standpoint, the authors build on dual-process theories and on the adaptive toolbox view from the “fast and frugal heuristics” perspective to develop an integrative conceptual framework that uncovers the mechanisms underlying the representativeness heuristic.

The authors’ conceptualization suggests that the search rule used in representativeness is based on analogical mapping from previous experience, the stopping rule is the representational stability of the analogs and the decision rule is the choice of the alternative upon which there is a convergence of representations and that exceeds the decision maker's aspiration level. In this framework, intuition may help the decision maker to cross-map potentially competing analogies, while overconfidence affects the search time and costs and alters both the stopping and the decision rule.

The authors develop a conceptual framework on representativeness, as one of the most common, though still poorly investigated, heuristics. The model offers a nuanced perspective that explores the cognitive and behavioral mechanisms that shape the use of representativeness in decision-making. The authors also discuss the theoretical implications of their model and outline future research avenues that may further contribute to enriching their understanding of decision-making processes.

The paper addresses the following research question: how do decision-makers use heuristics in their international business (IB) environment? Whereas, the literature has focused on entrepreneurial companies, here contrasting approaches to learning and using heuristics in international marketing (IM) decisions are examined and discussed.

The paper aims to address a gap in the study of micro-foundations of internationalization, exploiting research from other disciplinary fields. It combines a multidisciplinary literature review and longitudinal case studies to illustrate different approaches in learning and using heuristics by international marketers.

International marketers can adopt “closed” heuristics that are consolidated and consistently followed, or “open” heuristics, which are constantly being adapted and learned. Established multinationals learn heuristics in international marketing decision-making, following both “closed” and “open” models.

This paper offers an original contribution by presenting different approaches not yet examined in the literature, focusing on how international marketers make decisions through learning and using heuristic rules. The focus is on established exporters, in contrast to the literature that has largely paid attention to the effectiveness of heuristics in new entrepreneurial firms.

This paper proposes a theory-based process model for the generation, articulation, sharing and application of managerial heuristics, from their origin as unspoken insight, to proverbialization, to formal or informal sharing, and to their adoption as optional guidelines or policy.

A conceptual paper is built using systematic and non-systematic review of literature. This paper employs a three-step approach to propose a process model for the emergence of managerial heuristics. Step one uses a systematic review of empirical studies on heuristics in order to map extant research on four key criteria and to obtain, by flicking through this sample in a moving-pictures style, the static stages of the process; step two adapts a knowledge management framework to yield the dynamic aspect; step three assembles these findings into a graphical process model and uses insights from literature to enrich its description and to synthesize four propositions.

The paper provides insights into how heuristics originate from experienced managers confronted with negative situations and are firstly expressed as an inequality with a threshold. Further articulation is done by proverbialization, refining and adapting. Sharing is done either in an informal way, through socialization, or in a formal way, through regular meetings. Soft adoption as guidelines is based on expert authority, while hard adoption as policy is based on hierarchical authority or on collective authority.

The findings are theory-based, and the model must be empirically refined.

Practical advice for managers on how to develop and share their portfolio of heuristics makes this paper valuable for practitioners.

This study addresses the less-researched aspect of heuristics creation, transforms static insights from literature into a dynamic process model, and, in a blended-theory approach, considers insights from a distant, but relevant literature – paremiology (the science of proverbs).