Examining the effect of cognitive and emotional tendencies on investor decisions in behavioral finance perspective: an implementation on automotive sector employees

This study endeavors to reconceptualize individuals' investment decisions within the framework of behavioral finance theories, extending beyond the scope of traditional financial approaches that predominantly rely on rational expectations and macroeconomic indicators. By adopting a behavioral perspective, the research aims to empirically investigate the emotional and cognitive biases that influence investor behavior, thereby elucidating the dimensions and degree to which investment decisions deviate from the principles of rationality. The primary impetus for the study lies in identifying the behavioral factors that shape the investment decisions of individuals employed in Turkey's automotive industry one of the country's most prominent industrial sectors. It further seeks to evaluate the extent to which these factors contradict the assumptions of traditional financial theories, and to detect patterns aligned with the propositions of behavioral finance as established in the academic literature. In the research conducted with an online survey application on 417 employees serving in the automotive sector, it was concluded that investment decisions of individuals deviate from rationality; investment decisions are shaped by emotional and cognitive tendencies. It is concluded that behavioural biases in the form of overconfidence, herd behaviour and familiarity tendency are decisive in the investment decisions of the participants, but the tendency to avoid loss / regret does not have a significant effect on the financial decisions of investors. According to the demographic characteristics of the participants, it is found that male participants have more overconfidence and herding behaviour tendencies than female participants; married participants have more overconfidence tendencies than single participants, but single participants have more familiarity tendencies than married participants. These findings are largely consistent with the behavioural finance theories in the literature. Moreover, it is concluded that investor behaviour is shaped not only by economic indicators but also by individual psychology, social interaction and cultural values. In this respect, the study contributes to the behavioural finance literature at the theoretical and empirical level and suggests a multidimensional perspective for investment advisors, policy makers and individual investors to consider in their decision-making processes.