Table 3 Bayesian linear regression model...

Table 3

Bayesian linear regression model of herd behavior

Model comparison - I engage in investments that are SR
Models	P(M)	P(M\|data)	BF_M	BF₁₀	R²
Peeradvice + Hot stocks	0.017	0.177	12.722	1.000	0.263
Peeradvice + majority + friends'influence + Hot stocks + peerpressure	0.167	0.097	0.538	0.055	0.280
Peeradvice + majority + Hot stocks	0.017	0.086	5.524	0.483	0.275
Peeradvice + majority	0.017	0.065	4.085	0.365	0.246
Peeradvice + Hot stocks + peerpressure	0.017	0.058	3.662	0.329	0.268
Peeradvice + majority + Hot stocks + peerpressure	0.033	0.054	1.642	0.151	0.277
Peeradvice + majority + friends'influence	0.033	0.050	1.516	0.140	0.276

Model comparison - I engage in investments that are SR
Models	P(M)	P(M\|data)	BF_M	BF₁₀	R²
Peeradvice + Hot stocks	0.017	0.177	12.722	1.000	0.263
Peeradvice + majority + friends'influence + Hot stocks + peerpressure	0.167	0.097	0.538	0.055	0.280
Peeradvice + majority + Hot stocks	0.017	0.086	5.524	0.483	0.275
Peeradvice + majority	0.017	0.065	4.085	0.365	0.246
Peeradvice + Hot stocks + peerpressure	0.017	0.058	3.662	0.329	0.268
Peeradvice + majority + Hot stocks + peerpressure	0.033	0.054	1.642	0.151	0.277
Peeradvice + majority + friends'influence	0.033	0.050	1.516	0.140	0.276

Note(s): BFM (Bayesian Factor Model) quantifies the evidence favoring one model over another. P(M) is the probability of a specific model. P(M|data) is the probability of the model given the observed data. BF10 is the Bayes Factor supporting the alternative hypothesis over the null hypothesis. R² represents the coefficient of determination, indicating the proportion of variance in the dependent variable explained by the independent variables

Peeradvice: I rely on my friends'/family's/peer's advice for making an investment decision

Majority: I make my investment decisions based on the investment decisions taken by the majority of the investors

Hot stocks: I prefer to invest more in hot stocks (high in demand)

Peerpressure: I invest/will invest in socially responsible securities because my peers have invested in the same

Friends' influence: I invest in funds that I heard about from a friend

Source(s): Table by authors

[ViewLarge]