Abstract
Purpose: The primary objective of this study is to examine the impact of risk perception and behavioral and cognitive biases on the risk-taking behavior of investors in the Tehran Stock Exchange.
Method: This is a descriptive-correlational study, which is applied in terms of its objective and survey-based in terms of data collection. The statistical population of this study includes investors and managers of companies listed on the Tehran Stock Exchange during the period from 2015 to 2023, with a total of 348 companies. The data collection tool is a standardized questionnaire designed for the research variables. A closed-ended questionnaire based on the five-point Likert scale was used to measure the variables. The Moghimi Standard Questionnaire (2011) was employed to measure risk perception, the Sani Standard Questionnaire (2012) was used for behavioral biases, a researcher-made questionnaire was utilized for cognitive biases, and the Sani Standard Questionnaire (2012) was also used to assess investors' risk tolerance. To ensure content validity, expert opinions were sought, and Cronbach’s alpha coefficient (0.94) was used to assess the reliability of the questionnaires.
Results: The results of the study revealed that higher risk perception leads to a lower inclination to invest in both the short-term and long-term. Therefore, the first hypothesis of the research is confirmed. Furthermore, the results showed that more extroverted individuals are less likely to invest in the short-term and long-term.
Conclusion: The findings of this research indicate that risk perception, along with behavioral and cognitive biases, significantly influences investors' risk tolerance in the Tehran Stock Exchange.
Contribution: This research can assist in more accurately identifying behavioral biases and aligning individuals’ demographic characteristics with their investment styles.
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