Jakub Keller

Department of Corporate Finance, University of Lodz,

Poland

jakub.keller@uni.lodz.pl

ORCID 0000-0002-8213-9887

Behavioral distortions of individual investors in the decision-making process

Michał Radke

Department of Corporate Finance, University of Lodz,

Poland

michal.radke@uni.lodz.pl

ORCID 0000-0001-9252-5362

Abstract. The primary aim of this study was to assess the extent and dispersion of dispositional optimism and a positive orientation among individual investors in Poland. An ancillary objective was to scrutinize the correlation between dispositional optimism and positive orientation with factors such as gender, age, education, place of residence, and experience. To examine psychological variables such as dispositional optimism, positive orientation, and risk propensity, the authors used psychological tests: the Life Orientation Test (LOT-R), the Positive Orientation Scale (P- Scale), and the risk-related questionnaire inspired by the Kahneman and Tversky studies. The findings revealed that individual investors in Poland generally displayed a mixed outlook of dispositional optimism and positive orientation. Moreover, the study demonstrated that factors such as age, experience, and consistency in decision-making played a role in shaping the level of optimism among these investors. Unlike most studies that solely focus on measuring the errors resulting from excessive dispositional optimism, this paper offers insights into recognizing and understanding optimistic tendencies in the context of investment behavior.

Received: January, 2024

1st Revision: September, 2024

Accepted: December, 2024

DOI: 10.14254/2071-8330.2024/17-4/14

JEL Classification: G41

Keywords: decision-making, cognitive distortions, P-Scale test, LOT-R test