Abstract This doctoral thesis aims to contribute to investment behavior research by giving new information on the causes which generate differences in investment behavior. As causes to differences in behavior we focus on the influence of investors’ self-perceived attitudes, evaluations and judgments. We refer to these investor characteristics as subjective attributes. We also test the power of demographic and socio-economic characteristics as causes of differences in investment behavior and refer to these as objective attributes. We approach investment behavior from three dimensions and construct empirical research around each dimension. We find the predictive power of subjective attributes to be strong, which makes it important to take them into account when modeling investment behavior. Our data is collected from two different databases in which subjective and objective attributes are connected with actual investment behavior, i.e. investors’ actual wealth levels and allocations. This is rare because only seldom can researchers link subjective attributes with actual behavior. Our main contributions are the following: 1) Investor-specific risk-standing ability and other subjective attributes have a tight link with investor’s actual risk-standing ability and portfolio choice. This confirms the meaning and importance of European Union regulations which require financial institutions to clarify these issues and in that way betters investor protection. 2) Subjective investor attributes as measures of financial sophistication can be visible as a propensity to withdraw from the stock market during severe market crises. We state that, in addition to its very positive effects, financial sophistication may induce the investor to make mistakes like total withdrawal from the stock market, realization of short- term losses, or exposure to timing problems of stock portfolio rebuilding. 3) Simple questions asked as claims work better as measures of overconfidence than more commonly used calibration-based techniques. Several measures of overconfidence explain trading activity. Trust in one’s own market timing abilities shows as narrower diversification. Our thesis has implications for regulation, financial institutions, financial literacy education and investors themselves. / Tiivistelmä Tämän tutkimuksen tavoitteena on antaa uutta tietoa syistä, jotka aiheuttavat eroja yksityishenkilöiden sijoituskäyttäytymisessä. Käyttäytymiserojen syissä keskitymme sijoittajien itse mieltämiin mielipiteisiin, arviointeihin ja käsityksiin. Nimeämme nämä tekijät sijoittajan subjektiivisiksi ominaisuuksiksi. Lisäksi testaamme demografisten ja sosioekonomisten ominaisuuksien vaikutusta sijoituskäyttäytymisen eroihin. Nimeämme nämä tekijät sijoittajan objektiivisiksi ominaisuuksiksi. Tarkastelemme sijoituskäyttäytymistä kolmesta lähestymiskulmasta rakentamalla empiirisen tutkimuksen jokaisen kulman ympärille. Tulostemme mukaan subjektiivisten ominaisuuksien vaikutus sijoituskäyttäytymiseen on merkittävä, joten ne on syytä ottaa huomioon käyttäytymisen mallintamisessa. Tutkimusaineistomme muodostuu kahdesta erillisestä aineistosta, joissa kummassakin subjektiiviset ja objektiiviset ominaisuudet yhdistyvät todelliseen sijoituskäyttäytymiseen, eli sijoittajien olemassa oleviin varallisuusmääriin ja -jakaumiin. Tämä on poikkeuksellista, sillä subjektiivisia ominaisuuksia harvoin pystytään yhdistämään todelliseen sijoituskäyttäytymiseen. Tutkimuksemme tärkeimmät kontribuutiot ovat seuraavat. 1) Sijoittajakohtaisella riskinsietokyvyllä ja muilla subjektiivisilla ominaisuuksilla on vahva yhteys sijoittajan todelliseen riskinsietokykyyn ja osakeriskin osuuteen. Tämä vahvistaa Euroopan Unionin määräysten merkityksellisyyttä: näiden asioiden selvittäminen on hyödyllistä sijoittajasuojan parantamiseksi. 2) Subjektiiviset ominaisuudet sijoittajien taloudellista oppineisuutta kuvaavina tekijöinä voivat näkyä taipumuksena vetäytyä osakemarkkinoilta voimakkaan kurssilaskun tilanteessa. Taloudellisen oppineisuuden yleisesti havaittujen positiivisten vaikutusten lisäksi oppineisuus voi myös johtaa sijoitusvirheisiin, kuten vetäytymiseen osakemarkkinoilta, lyhyen aikavälin tappioiden realisoimiseen ja salkun uudelleen rakentamisen mukanaan tuomaan ajoitusriskiin. 3) Yksinkertaiset väitemuodossa esitetyt kysymykset toimivat yliluottamuksen mittareina paremmin kuin enemmän käytetyt kalibrointipohjaiset mittarit. Useat yliluottamuksen mittarit selittävät kaupankäynnin aktiivisuutta. Luottamus omiin kykyihin ennustaa markkinaliikkeitä näkyy kapeampana salkun hajautuksena. Tutkimuksellamme on merkitystä lainsäätäjille, finanssialan yrityksille, tahoille, jotka vastaavat sijoittajatietämyksen kouluttamisesta, sekä sijoittajille itselleen.

In december 2019, the first cases of covid-19 were reported in Wuhan, China. Since then, the virus has spread rapidly around the world. In order to try to stop the spread of the virus, isolation has become actual. Except affecting the public health, the virus has caused deep traces in the global economy. A clear stock market fall on the Swedish stock exchange could be observed in February-March 2020. The financial crisis that has arisen is the first crisis many of the young investors, of the age 18–30 years old have to manage. Due to the economic crisis that has arisen, this study aimed to describe young investors' decision-making in the financial market during the period 1 January 2020 to 5 May 2020. The research question goes as follows: What factors influence young investors' decision-making in the financial market during an economic crisis? The study was conducted on the basis of the Theory of Behavioral Finance. This theory assumes that the individual's decision-making in the financial market is largely influenced by emotions and other psychological factors. Furthermore, the theory is based on a number of different assumptions about human psychological and behavioral phenomena that influence investment decisions. The procedure for conducting the study was to make a descriptive quantitative study. This meant that a questionnaire was passed on to young investors and that the answers were then compiled in diagrams and tables. The results indicated that the factors overconfidence, representativeness bias and anchoring bias seemed most likely to describe young investors' decision-making in the financial market during an economic crisis. At the same time, a reasonable interpretation seemed to be that herding behavior and risk and loss aversion cannot describe the young investors' decision-making to a large extent. The importance of mental accounting could not be determined in this context, as the answers received provided an incomplete basis for deciding this. To be able to draw conclusions about the role of mental accounting in decision-making, several issues that dealt with this would have been useful. One suggestion for continued research is to study other factors that may underlie young investors' decision-making during an economic crisis.

Cette thèse étudie le secteur bancaire tunisien et pourquoi ce dernier se caractérise par des volumesimportants de prêts non performants. Sur un échantillon de 11 banques commerciales cotées durant lapériode 2009-2011, nous examinons l’impact de la structure de propriété et des caractéristiques duconseil d’administration sur le risque de crédit. Nos résultats des régressions sur données de panelrévèlent que ces mécanismes de gouvernance sont défaillants jusqu’à présent et qu’ils ont contribué àl’aggravation des prêts improductifs. A partir de l’apparition de nouvelles tentatives à expliquer lesdéfaillances bancaires par l’apport de la finance comportementale, nous concluons le rôle de l’excès deconfiance dans la gestion de risque de crédit imprudente des banques tunisiennes.Dans le but d’approfondir notre recherche, il nous semble intéressant de vérifier l’impact de l’excès deconfiance sur le comportement de prise de risque d’un responsable de crédits. Les régressionslogistiques multinomiales montrent que l’excès de confiance chez les responsables de crédit évolueavec l’expérience et influence négativement leurs prises de risque de crédit. / This thesis studies the Tunisian banking sector and why it is characterized by large volumes of nonperformantloans. Based on a sample of 11 commercial listed banks during 2009-2011, we examinethe impact of ownership structure and board characteristics on credit risk. Our results reveal thedeficiency of these governance mechanisms.From the appearance of new attempts to explain bank failures by the contribution of behavioralfinance, we try to identify the role of overconfidence in the reckless credit policy. Our results showthat overconfidence recent worsening Non Performants Loans of Tunisian banks.In order to deepen our research, it seems interesting to check the impact of overconfidence on bankers’risk-taking behavior. We extend our work with an experimental study to detect the impact ofoverconfidence on the banker’s risk-taking behavior. Our results of multinomial logistic regressionsshow that banker’s overconfidence evolves with experience and influences negatively his credit risktakingbehavior.

Background: For the past 30 years, the neoclassical finance has been questioned bybehavioural finance. The main difference is behavioural finance ́s ability to explain a behaviour that deviate from rationality. One of the major biases within behavioural finance is overconfidence. Overconfident behaviour describes an investor with too strong belief in their own ability. This bias is not well-examined within behavioural finance in Sweden. The consequences of overconfidence are the investor ́s overvaluation skills which in turn leads to unnecessary risk-taking, excessive trading and economic losses. Purpose: The purpose of this thesis is to investigate if the overconfident bias exists among Swedish private investors. A study if the demographic factors; gender, age, marital status, education, and experience effect the level of overconfident behaviour. Further, an investigation to identify industries overconfident investors prefer or despise. Method: Our study use a deductive approach with a quantitative research. From the basis of previous studies, five hypotheses explaining a relation between demographic factors and overconfidence have been formulated. The data is collected through an online survey, published in finance forums between 2020-03-10 to 2020-03-22 which gave 233 participants. A binary logistic model was performed in STATA to examine if the hypothesis should be rejected or not. Conclusion: The findings from our study show presence of overconfidence among Swedish private investors. Statistically significant results confirm that gender, age, education, and experience have an impact on overconfident behaviour. Men are more overconfident than women, younger investors act more overconfident, higher education increase overconfidence, and more experienced investors are more overconfident.

A central topic in behavioural finance is extensive trading. One of the most common behav- ioural explanations for this phenomenon is overconfidence. In finance, overconfident traders feel that their information is sufficient to justify a trade even though it is not. Investors who consider themselves to be above average in their level of expertise show higher trading volumes. During the COVID-19 pandemic, the trading volume in the financial markets increased significantly. Further, young and inexperienced traders entered financial markets and volatility increased. Overconfidence could provide explanations for some of these financial market particularities. The study of Glaser and Weber (2007), which investigates the correlation of overconfidence and trading volume, lays the foundation for this study. We extend their research with a survey testing the degree of overconfidence and trading volume during COVID-19. The central aim of the thesis is to investigate to what extent overconfidence influences the trading volume during the COVID-19 pandemic. The analysis is unable to show a significant positive effect of overconfidence on the trading volume during COVID-19. But our research supports the findings that younger and inexperienced traders entered the market during 2020, who are on average more overconfident than experienced traders. The results further show that retail investors with more than two years of trading experience have significantly increased their trading volume during COVID-19. The analysis also provides evidence that during the COVID- 19 pandemic, traders who assign themselves above average within their investment skills traded significantly more.

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Binge drinking (BD) entails excessive alcohol intake in a short time period. Despite numerous negative outcomes associated with BD and efforts to curtail it, rates remain steady. Thus, it is important to identify "who" binge drinks and "why" it occurs. Drawing from past research, I sought to replicate the link between trait narcissism and BD; moreover, I examined if overconfidence and confidence-based risk-taking assessed via the Georgia Gambling Task (GGT), explained why they did so. The results generally supported my hypotheses. As expected, narcissism related to poor GGT performance and high levels of BD; likewise, poor GGT performance related to BD. GGT performance accounted for (i.e., mediated) the narcissism-to-BD relation, but only partially, in subsequent regression analyses. In the discussion I focus on the social and clinical relevance of these findings especially for university interventions, parents, and therapists. I also discuss avenues for future research including other potential mediators.

Background: The year 2022 was eventful and marked by a significant stock market decline. Private investors faced increased pressure to remain calm and not fall into the trap of psychological biases that are particularly destructive during periods like this one. This has contributed to why individuals choose to seek guidance from professional advisers. But the question is whether professional advisers could avoid these psychological biases during this period? A professional adviser should, based on their education, have the ability to minimize the risk of psychological biases that investments can lead to. Their work includes mandatory knowledge updates from the license issuer, Swedsec. The knowledge update 2021 included knowledge of behavioral finance, but the question is whether this knowledge has changed the work of a professional adviser? Because if even professional advisers cannot avoid psychological pitfalls, what is the point of taking guidance? Purpose: The purpose of the study is to map professional advisers' knowledge of behavioral finance and how overconfidence, herd behavior and the disposition effect can be observed in their advisory process during the 2022 stock market decline. Furthermore, the study aims to analyze and create an understanding of how the work of professional advisers has changed since the knowledge update 2021. Method: To fulfill the purpose of the study, a qualitative method has been used and nine semi-structured interviews with Swedsec-licensed professional advisers have been held. Furthermore, an abductive approach has been adopted to have the opportunity to test the interaction between previous theories and the reality but also to be able to find new theories and patterns based on real observations. Conclusion: The results of the study showed that the knowledge of behavioral finance among professional advisers is inadequate but not necessarily wrong. The psychological biases have, more or less, been observed in the advisory process during 2022 where the most prominent bias was the disposition effect. Despite the lack of knowledge, professional advisers have developed unconscious strategies that can mitigate, but not eliminate, the risk of falling into the trap of psychological biases. Finally, none of the advisers have changed their work after Swedsec's 2021 knowledge update to prevent irrational behavior. / Bakgrund: Börsåret 2022 var ett händelserikt år som präglades av en betydande börsnedgång. Icke- professionella investerare stod således inför ökad press att behålla lugnet och inte falla offer för psykologiska bias som är särskilt destruktiva i perioder som denna. Detta har bidragit till varför individer väljer att söka vägledning från professionella rådgivare. Frågan är dock om professionella rådgivare själva kunde motstå att falla offer för psykologiska bias under den här perioden? En professionell rådgivare bör, utifrån deras utbildning, ha förmågan att minimera risken att falla för psykologiska bias i investeringssammanhang. Deras arbete innefattar även obligatoriska kunskapsuppdateringar från licensutgivaren Swedsec. Kunskapsuppdateringen 2021 innehöll att rådgivaren ska ha kännedom kring ekonomisk psykologi, men frågan är om den kunskapen har nått ut och förändrat de professionella rådgivarnas arbete? För om inte ens professionella rådgivare lyckas motstå psykologiska fallgropar, kommer deras vägledning således mer stjälpa än hjälpa kunden? Syfte: Syftet med studien är att kartlägga professionella rådgivares kännedom kring beteendefinans samt hur överkonfidens, flockbeteende och dispositionseffekten kan tydas i deras rådgivning under 2022 års börsnedgång. Vidare syftar studien till att analysera och skapa förståelse för hur arbetet förändrats hos de professionella rådgivarna sedan kunskapsuppdateringen 2021. Metod: För att uppfylla studiens syfte har en kvalitativ metod använts och nio semistrukturerade intervjuer med Swedsec-licenserade professionella rådgivare genomförts. Vidare har en abduktiv ansats antagits för att ha möjlighet att testa samspelet mellan tidigare teorier och verkligheten men även kunna hitta nya teorier och mönster utifrån verkliga observationer. Slutsats: Studiens resultat visade att det fanns bristande kännedom kring beteendefinans bland de professionella rådgivarna. Det betyder dock inte att den befintliga kunskapen är felaktig. Under börsåret 2022 kunde de utvalda börspsykologiska faktorerna antydas i rådgivningen, men i varierande grad, där den mest framträdande biasen var dispositionseffekten. Trots den bristfälliga kännedomen har de professionella rådgivarna utvecklat omedvetna strategier för att mildra, men inte eliminera, risken att falla för psykologiska bias. Slutligen har ingen av rådgivarna förändrat sitt arbetssätt efter Swedsecs kunskapsuppdatering från 2021 för att förhindra irrationellt beteende.

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Trust is essential for individuals. We want others to keep their promises and meet our expectations (Dan der Cruijsen et al., 2020, p.680-681). This also applies to banks. For many individuals, trusting their bank is essential to ensure financial security. The interest rate increases between 2022 and 2023, and the increased bank profits, as a result, caught the attention of many individuals. Could two events like these possibly disrupt individuals' trust toward banks? As a result of the high inflation in Sweden in recent years, interest rates increased significantly between 2022 and 2023 which shocked many individuals. Furthermore, banks' profits increased because of the increased interest rates. While banks are profit-making companies, they need to be cautious not to lose the trust of their customers.  This study is based on theories fundamental to answering the study's research questions and purpose. The purpose is to provide an understanding of the factors that affect individuals trust toward their main bank. In addition, the study analyzes factors that may influence the disruption of trust toward banks. The focus will be on whether the interest rate increases and banks' increased profits between 2022 and 2023 have disrupted individuals' trust. The theories used to respond to the purpose are the anchoring effect, point of reference, financial literacy, asymmetric information, and overconfidence.  A quantitative method was adapted for this study to collect data through a questionnaire. By building the questionnaire on appropriate theories, we could examine how our results were consistent with previous research. Later, a linear regression analysis was conducted in Stata based on our collected data. Correlation, multicollinearity, and heteroscedasticity were tested to obtain proper values.  The results from this study show several factors that affect individuals' trust toward banks. Also, it indicates that the sudden interest rate increases and the increased bank profits between 2022 and 2023 disrupt individuals' trust toward banks. Some factors that affect the level of trust are whether the individual has experience of incorrect financial advice, lives in a small city, and feels that they do not receive enough information from the bank. These factors can be linked to previous research on asymmetric information. Other factors that affect trust are how easily individuals generally trust other people and whether individuals visit a bank office for banking affairs. These factors can be linked to previous research on point of reference. Furthermore, individuals having an elementary school degree as the highest education level and unemployed individuals are factors affecting trust that can be linked to financial literacy. These mentioned factors are only a few, the remaining ones are to be found in the result.  This study provides a better insight into trust and trust disruption because of the two events, increased interest rates, and increased bank profits. The results are beneficial both for individuals and banks.