The Effect Of Risk Attitude And Peer Effect On Stock Price Search Behavior

In the process of selling stocks in the capital market,individual investors often wait for an acceptable price to appear before they decide to sell.This is called the investor's stock price search process.The stock price search process is directly related to the final income of individual investors,but it is easily interfered by many internal and external factors,which ultimately lead to the inefficiency of the selling strategy.This paper studied the influence of the internal factor of risk attitude and the external factor of peer effect on the stock price search behavior of individual investors to better understand the individual investors' decisionmaking mechanism.Then,we can better guide investors' investment decisions and promote the healthy,stable and long-term development of the capital market.This paper created a simplified stock trading market and performed a sequential search task in which subjects decided when to sell the stock whose price was randomly drawn from a uniform distribution.Furthermore,this paper conducted two experimental studies from the level of behavioral science and neuroscience.In the first study,the transcranial direct current stimulation(t DCS)was used to stimulate the dorsolateral prefrontal cortex to change subject's risk attitude.Then we studied the changes in search behavior before and after the stimulation.The main concern was the change of the behavior of the subjects under different stimulation modes.Gender factors were also considered in this study.The main conclusion of this study was the impact of risk factors on the stock price search behavior.In the second study,through the behavior experiment,we compared the actual experimental data with the simulate grouped data and investigated whether the behavior of the subjects would show the peer effect under the condition of pairwise pairing and access to decision-making information of the group members.We also considered the effects of feedback,risk attitude,cognitive ability and gender on the peer effect.The main conclusion of this study was the influence of the peer effect on the stock price search behavior.This paper drew the following research conclusions:(1)The subjects receiving right anodal/left cathodal stimulation stopped searching late,significantly increased their accepted point,which was greater than predicted by the optimal rule,and generated a significantly higher search income.That is,those subjects may have changed their risk attitude to search for a higher stock price and receive a higher benefit.In our results,the effect of stimulation on search behavior was mainly driven by the female subjects rather than by the male subjects.The female subjects tended to increase their acceptable stock price and gained higher search income after the right anodal/left cathodal t DCS,while the male subjects showed no significant difference.(2)The peer effect was significant in the stock price search process of pairwise pairing.This showed that the participants in the same group would learn from each other's information and made decisions.Then,they would show more similar behavior during the search process.Meanwhile,feedback,risk attitude and gender factors would affect the strength of the peer effect.In general,the peer effect in stock price search was more significant when the feedback was absent,the risk attitude difference between members of the same group was small,or the two members of the same group were of opposite sex.The conclusions of this paper drew the specific mechanism of the effect of risk attitude and peer effect on individual investors' stock price search behavior.It can help to better understand and explain the stock investors' stock selling behavior,regulate the stock market for relevant institutions and provide policy advice to protect investor rights.