Table A2 Behavioural bias questions... | Emerald Publishing

Table A2

Behavioural bias questions mapped to the latent variable

Question	Options	Latent variable	Question inspired from
b1. Stock 'A' fell by 25% based on negative news, your investment is in deep red. You continue to hold the stock, in the hope that it will bounce back	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Disposition bias/Overconfidence bias	As per Kaustia (2018), a propensity to sell a stock remains constant over a wide range of losses. This is in line with prospect theory's prediction that propensity to sell a stock reduces as the price moves away from the purchase price in either direction
b2. Your stock 'B' was bought with the intent of gaining x% returns. You have hit the target and happily exit your holding, despite favourable news around the stock	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Disposition bias/Overconfidence bias
b3. There is negative news around stock 'A', which was bought after intense research. You ignore the news since you have complete faith in your research	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Anchoring bias	Psychology states that individual's judgement relies heavily on information to which they have been previously exposed. Investor's often based their future investment decisions on preceding price information (Robin and Angelina, 2020)
b4. You have assessed stock 'B' to be undesirable for your portfolio, however, a trusted source indicates that the stock could see a sharp upside. You have faith in your research, you ignore the news	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Anchoring bias
b5. If the 2008 market crash were to repeat, you would not panic and continue to hold your stocks. You believe markets will rebound like in previous times	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Experiential bias	The theory of experiential learning states that future choices are influenced by past experiences. Individuals tend to reinforce past choices with positive rewards and discount past options with negative rewards (March, 1996)
b6. The market correction during the current pandemic was similar to the market crash in 2008 and 1992. Do you agree?	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Experiential bias
b7. Markets are scaling new highs and are overvalued, one could expect a sharp correction in the near future. Do you agree?	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Loss aversion bias	Psychologically losses are two times more influential in decision making than gains. There is no standard definition of loss aversion, hence leading to multiple interpretations (Abdellaoui et al., 2007; Ainia and Lutfi, 2018)
b8. Midcap stocks can be rewarding, but there are chances of losing capital as well. Do you agree?	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Loss aversion bias
b9. I would rather invest in the bigger names in the industry – TATA, Reliance, Tier I IT companies etc., than invest in unknown names. To what extent do you agree?	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Familiarity bias/Experiential bias	Individuals on an average have more confidence in home-grown and familiar stocks than unknown/foreign stocks. Competence and expertise may be a trait that influences this bias (Kilka and Weber, 2010)
b10. Sources seem to indicate that 'Y' sector is likely to flourish in near future. It only makes sense to buy 'Y' sector	a) Strongly Agree b) Agree c) Neutral d) Disagree e) Strongly disagree	Herding	A more realistic risk perception is attributed to less herding behaviour and lower loss aversion. Herding also has a mediating effect on the confidence level of investors (Lin, 2012)

Question	Options	Latent variable	Question inspired from
b1. Stock 'A' fell by 25% based on negative news, your investment is in deep red. You continue to hold the stock, in the hope that it will bounce back	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Disposition bias/Overconfidence bias	As per Kaustia (2018), a propensity to sell a stock remains constant over a wide range of losses. This is in line with prospect theory's prediction that propensity to sell a stock reduces as the price moves away from the purchase price in either direction
b2. Your stock 'B' was bought with the intent of gaining x% returns. You have hit the target and happily exit your holding, despite favourable news around the stock	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Disposition bias/Overconfidence bias
b3. There is negative news around stock 'A', which was bought after intense research. You ignore the news since you have complete faith in your research	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Anchoring bias	Psychology states that individual's judgement relies heavily on information to which they have been previously exposed. Investor's often based their future investment decisions on preceding price information (Robin and Angelina, 2020)
b4. You have assessed stock 'B' to be undesirable for your portfolio, however, a trusted source indicates that the stock could see a sharp upside. You have faith in your research, you ignore the news	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Anchoring bias
b5. If the 2008 market crash were to repeat, you would not panic and continue to hold your stocks. You believe markets will rebound like in previous times	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Experiential bias	The theory of experiential learning states that future choices are influenced by past experiences. Individuals tend to reinforce past choices with positive rewards and discount past options with negative rewards (March, 1996)
b6. The market correction during the current pandemic was similar to the market crash in 2008 and 1992. Do you agree?	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Experiential bias
b7. Markets are scaling new highs and are overvalued, one could expect a sharp correction in the near future. Do you agree?	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Loss aversion bias	Psychologically losses are two times more influential in decision making than gains. There is no standard definition of loss aversion, hence leading to multiple interpretations (Abdellaoui et al., 2007; Ainia and Lutfi, 2018)
b8. Midcap stocks can be rewarding, but there are chances of losing capital as well. Do you agree?	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Loss aversion bias
b9. I would rather invest in the bigger names in the industry – TATA, Reliance, Tier I IT companies etc., than invest in unknown names. To what extent do you agree?	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Familiarity bias/Experiential bias	Individuals on an average have more confidence in home-grown and familiar stocks than unknown/foreign stocks. Competence and expertise may be a trait that influences this bias (Kilka and Weber, 2010)
b10. Sources seem to indicate that 'Y' sector is likely to flourish in near future. It only makes sense to buy 'Y' sector	a) Strongly Agreeb) Agreec) Neutrald) Disagreee) Strongly disagree	Herding	A more realistic risk perception is attributed to less herding behaviour and lower loss aversion. Herding also has a mediating effect on the confidence level of investors (Lin, 2012)

Source(s): Compiled by authors by consulting various sources