An examination of corporate financial decisions from a behavioral finance perspective: The case of Tokat province

The decisions made by managers can increase the competitive power of their companies. These decisions are influenced not only by knowledge and experience, but also by emotional and cognitive tendencies in their behavior. Behavioral finance is used to understand the impact of human behavior on the decisions of investors and managers in the rapidly growing financial sector. The purpose of this study is to examine the effects of overconfidence and optimism behavioral biases on managers' ability to make healthier financial decisions. To this end, the questionnaire designed by Tekin (2015) has been revised and used. The effects of overconfidence and optimism biases are investigated among managers, owners, and executives of 63 SMEs operating in the manufacturing industry in the central district of Tokat. The hypotheses included in the study were tested using parametric and non-parametric tests. The results of the study indicate that company managers/owners operating in Tokat province exhibit low levels of overconfidence bias but do not exhibit low levels of optimism bias. Furthermore, hypotheses based on previous studies suggest that overconfidence and optimism behavioral biases have specific effects on financial decisions. Keywords: Behavioral Finance, Financial Decision, Decision Making, Overconfidence Bias, Optimism Bias