Abstract
Despite an intuitive appeal regarding association between personality and investment efficacy, there is a dearth of empirical support for the effects of theoretically meaningful personality difference on intuitive and analytical ability, which further explains investment efficacy. The current study attempts to explore this relationship through survey of 222 active investors in India. The results provide evidence that type B investors have superior intuitive ability, analytical ability and investment efficacy. The study is unique in exploring role of personality in ambidextrous decision-making framework, where rationality and intuition iteratively operates in parallel, yet synchronous fashion. The study documents that type B investors are more efficacious than type A investors.
Similar content being viewed by others
References
Abdussalam Z (2014) The influence of cultural and religion on trust in the emerging financial market in Libya. Int J Behav Acc Finance 4(3):206–220
Ackert LF, Church BK, Tkac PA (2010) An experimental examination of heuristic-based decision making in a financial setting. J Behav Finance 11(3):135–149
Allen DE, Keller M, McGoun E (2015) Teleinvestmentevangelists: celebrity, ritual and religion and the quest to “beat the market”. Qual Res Financ Mark 7(3):290–308
Arand D, Kerl A, Walter A (2015) When do sell-side analyst reports really matter? Shareholder protection, institutional investors and the informativeness of equity research. Eur Financ Manag 21(3):524–555
Bandura A (1997) Self-efficacy: the exercise of control. Macmillan, London
Betsch C (2004) Preference for intuition and deliberation (PID): an inventory for assessing affect and cognition based decision-making. Zeitschrift für Differentielle und Diagnostische Psychologie 25:179–197
Bortner RW (1969) A short rating scale as a potential measure of pattern A behavior. J Chronic Dis 22(2):87–91
Bucciol A, Zarri L (2017) Do personality traits influence investors’ portfolios? J Behav Exp Econom 68:1–12
Caplan RD, Jones KW (1975) Effects of work load, role ambiguity, and type A personality on anxiety, depression, and heart rate. J Appl Psychol 60(6):713
Carducci BJ, Wong AS (1998) Type A and risk taking in everyday money matters. J Bus Psychol 12(3):355–359
Cesarini D, Johannesson M, Lichtenstein P, Sandewall Ö, Wallace B (2010) Genetic variation in financial decision-making. J Finance 65(5):1725–1754
Charles A, Kasilingam R (2014) Do investors’ emotions determine their investment personality? Parikalpana KIIT J Manag 10(2):45
Chesney MA, Black GW, Chadwick JH, Rosenman RH (1981) Psychological correlates of the type A behavior pattern. J Behav Med 4(2):217–229
Chi MT, Rees E, Glaser R (1981) Expertise in problem solving (No. TR-5). Pittsburgh Univ pa Learning Research and Development Center, Pittsburgh
Chitra K, Ramya Sreedevi V (2011) Does personality traits influence the choice of investment? IUP J Behav Finance 8(2):47–57
Cianci AM (2008) The impact of investor status on investors’ evaluation of negative and positive, separate and combined information. J Behav Finance 9(3):117–131
Cooper CL, Rout U, Faragher B (1989) Mental health, job satisfaction, and job stress among general practitioners. BMJ 298(6670):366–370
Cooper CL, Clarke S, Rowbottom AM (1999) Occupational stress, job satisfaction and well-being in anaesthetists. Stress Med 15(2):115–126
Crysel LC, Crosier BS, Webster GD (2013) The dark triad and risk behavior. Personal Individ Differ 54(1):35–40
Donnelly G, Iyer R, Howell RT (2012) The big five personality traits, material values, and financial well-being of self-described money managers. J Econ Psychol 33(6):1129–1142
Durand RB, Newby R, Sanghani J (2008) An intimate portrait of the individual investor. J Behav Finance 9(4):193–208
Durand R, Newby R, Tant K, Trepongkaruna S (2013) Overconfidence, overreaction and personality. Rev Behav Finance 5(2):104–133
Epstein S (1998) Emotions and psychology from the perspective of cognitive-experiential self-theory. In: Flack WF, Laird JD (eds) Emotions in psychopathology: theory and research, series in affective science. Oxford University Press, New York, pp 57–69
Friedman M, Rosenman RH (1959) Association of specific overt behavior pattern with blood and cardiovascular findings: blood cholesterol level, blood clotting time, incidence of arcus senilis, and clinical coronary artery disease. J Am Med Assoc 169(12):1286–1296
Gherzi S, Egan D, Stewart N, Haisley E, Ayton P (2014) The meerkat effect: personality and market returns affect investors’ portfolio monitoring behaviour. J Econ Behav Organ 107:512–526
Gill A, Biger N, Mand HS, Gill SS (2011) Factors that affect mutual fund investment decision of Indian investors. Int J Behav Acc Finance 2(3/4):328–345
Goldfayn-Frank O (2016) Personality traits and financial decisions of the households (November 10, 2018). https://doi.org/10.2139/ssrn.2764175
Grinblatt M, Keloharju M, Linnainmaa J (2011) IQ and stock market participation. J Finance 66(6):2121–2164
Hickman E (2014) Boardroom gender diversity: a behavioural economics analysis. J Corp Law Stud 14(2):385–418
Hicks RE, Mehta YP (2018) The big five, type A personality, and psychological well-being. Int J Psychol Stud 10(1):49
Hunter K, Kemp S (2004) The personality of e-commerce investors. J Econ Psychol 25(4):529–537
Jadlow JW, Mowen JC (2010) Comparing the traits of stock market investors and gamblers. J Behav Finance 11(2):67–81
Jamal M (1990) Relationship of job stress and type-A behavior to employees’ job satisfaction, organizational commitment, psychosomatic health problems, and turnover motivation. Hum Relat 43(8):727–738
Keil M, Depledge G, Rai A (2007) Escalation: the role of problem recognition and cognitive bias. Decis Sci 38(3):391–421
Khatri N, Ng HA (2000) The role of intuition in strategic decision making. Hum Relat 53(1):57–86
Kleine J, Wagner N, Weller T (2016) Openness endangers your wealth: noise trading and the big five. Finance Res Lett 16:239–247
Krishnan R, Beena F (2009) Measurement of conformity to behavior finance concepts and association with individual personality. IUP J Behav Finance 6(3/4):25
Lauriola M, Levin IP (2001) Personality traits and risky decision-making in a controlled experimental task: an exploratory study. Personal Individ Differ 31(2):215–226
Lidén ER (2006) Stock recommendations in Swedish printed media: leading or misleading? Eur J Finance 12(8):731–748
Lo AW, Repin DV, Steenbarger BN (2005) Fear and greed in financial markets: a clinical study of day-traders. Am Econ Rev 95(2):352–359
Matzler K, Bailom F, Mooradian TA (2007) Intuitive decision making. MIT Sloan Manag Rev 49(1):13
Mayfield C, Perdue G, Wooten K (2008) Investment management and personality type. Financ Serv Rev 17(3):219
McAdams DP (1992) The five-factor model in personality: a critical appraisal. J Personal 60(2):329–361
McCannon BC (2014) Finance education and social preferences: experimental evidence. J Behav Exp Finance 4:57–62
McCrae RR, Costa PT (1987) Validation of the five-factor model of personality across instruments and observers. J Personal Soc Psychol 52:81–90
Nga JKH, Leong KY (2013) The influence of personality trait and demographic on financial decision making among generation Y. Young Consum 14(3):230–243
Nicholson N, Soane E, Fenton-O’Creevy M, Willman P (2005) Personality and domain-specific risk taking. J Risk Res 8(2):157–176
Nigam RM, Srivastava S, Banwet DK (2018) Behavioral mediators of financial decision making–a state-of-art literature review. Rev Behav Finance 10(1):2–41
Oehler A, Wendt S, Wedlich F, Horn M (2018) Investors’ personality influences investment decisions: experimental evidence on extraversion and neuroticism. J Behav Finance 19(1):30–48
Pak O, Mahmood M (2015) Impact of personality on risk tolerance and investment decisions. Int J Commer Manag 25(4):370–384
Perry VG (2008) Giving credit where credit is due: the psychology of credit ratings. J Behav Finance 9(1):15–21
Petticrew MP, Lee K, McKee M (2012) Type A behavior pattern and coronary heart disease: Philip Morris’s “crown jewel”. Am J Public Health 102(11):2018–2025
Pretz JE (2008) Intuition versus analysis: strategy and experience in complex everyday problem solving. Mem Cognit 36(3):554–566
Roche H, Tompaidis S, Yang C (2013) Why does junior put all his eggs in one basket? A potential rational explanation for holding concentrated portfolios. J Financ Econ 109(3):775–796
Rout U (1999) Gender differences in stress, satisfaction and mental wellbeing among general practitioners in England. Psychol Health Med 4(4):345–354
Sadi R, Asl HG, Rostami MR, Gholipour A, Gholipour F (2011) Behavioral finance: the explanation of investors’ personality and perceptual biases effects on financial decisions. Int J Econ Finance 3(5):234
Sebi Investor Survey (SIS 2015). https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=4&ssid=44&smid=0. Accessed 10 April 2017
Sinclair M, Ashkanasy NM (2005) Intuition: Myth or a decision-making tool? Manag Learn 36(3):353–370
Soane E, Dewberry C, Narendran S (2010) The role of perceived costs and perceived benefits in the relationship between personality and risk-related choices. J Risk Res 13(3):303–318
Solomon DH, Soltes E, Sosyura D (2014) Winners in the spotlight: media coverage of fund holdings as a driver of flows. J Financ Econ 113(1):53–72
Suls J, Wan CK (1989) The relation between type A behavior and chronic emotional distress: a meta-analysis. J Personal Soc Psychol 57(3):503
Sumi K, Horie K, Hayakawa S (1997) Optimism, type A behavior, and psychological well-being in Japanese women. Psychol Rep 80(1):43–48
Tauni MZ, Fang HX, Iqbal A (2016) Information sources and trading behavior: Does investor personality matter? Qual Res Financ Mark 8(2):94–117
Travers CJ, Cooper CL (1993) Mental health, job satisfaction and occupational stress among UK teachers. Work Stress 7(3):203–219
van Riel AC, Ouwersloot H, Lemmink J (2006) Antecedents of effective decision making: a cognitive approach. J Manag Econ 4:7–28
Vigil-Colet A (2007) Impulsivity and decision making in the balloon analogue risk-taking task. Personal Individ Differ 43(1):37–45
Wang H, Zhang J, Wang L, Liu S (2014) Emotion and investment returns: situation and personality as moderators in a stock market. Soc Behav Personal Int J 42(4):561–569
Xu Y, Briley DA, Brown JR, Roberts BW (2017) Genetic and environmental influences on household financial distress. J Econ Behav Organ 142:404–424
Young S, Gudjonsson GH, Carter P, Terry R, Morris R (2012) Simulation of risk-taking and it relationship with personality. Personal Individ Differ 53(3):294–299
Zhang J, Wang H, Wang L, Liu S (2014) Is there any overtrading in stock markets? The moderating role of big five personality traits and gender in a unilateral trend stock market. PLoS ONE 9(1):e87111
Zhang Y, Zhang H, Seiler MJ (2015) Impact of information disclosure on prices, volume, and market volatility: an experimental approach. J Behav Finance 16(1):12–19
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Misra, R., Srivastava, S. & Banwet, D.K. Are type B investors efficacious? Exploring role of personality in ambidextrous investment decision-making. Decision 46, 27–34 (2019). https://doi.org/10.1007/s40622-018-0200-1
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40622-018-0200-1