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Behaviour in Financial Decision-Making
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Behaviour in Financial Decision-Making

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 1 April 2026 | Viewed by 12414

Special Issue Editors

Dr. Domicián Máté

E-Mail Website
Guest Editor
1. Engineering Management and Entrepreneurship Department, Faculty of Engineering, University of Debrecen, 4032 Debrecen, Hungary
2. College of Business and Economics, University of Johannesburg, Johannesburg 2006, South Africa
Interests: industrial economics; sustainable development; food and energy security
Special Issues, Collections and Topics in MDPI journals
Prof. Dr. Maria Fekete-Farkas

E-Mail Website
Guest Editor
Institute of Economic Sciences, Hungarian University of Agricultural and Life Sciences, H-2100 Gödöllő, Hungary
Interests: sustainable development; natural resource management; productivity; economic and social effects of climate change; consumer behavior; Industry 4.0; social capital; relationship management; market structure; pricing; renewable energy; economic and social
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

Financial decision-making is a complex process influenced not only by rational considerations but also by cognitive biases, emotions, social dynamics, and institutional contexts. Recent advancements in behavioural finance and related fields have demonstrated that both individual and collective decisions often diverge from the predictions of traditional financial theories. Gaining insight into these behavioural dynamics is essential for enhancing both academic research and its practical applications in areas such as investment strategy, corporate governance, financial innovation, and policy design.

This Special Issue invites the submission of theoretical, empirical, and experimental contributions that examine how behavioural factors impact financial decision-making within markets, organizations, and society at large. Areas of interest include, but are not limited to, the following:

  • Cognitive biases and heuristics in both individual and institutional investment decisions;
  • Behavioural drivers influencing household finance, saving, and consumption choices;
  • The interplay of investor sentiment, emotion, and risk perception;
  • The impact of social dynamics and cultural influences on financial behaviour;
  • Behavioural aspects of corporate finance and governance;
  • The impact of digitalization, fintech, and AI on decision-making processes;
  • Policy implications stemming from behavioural insights for regulation and financial stability.

By highlighting interdisciplinary perspectives, this Special Issue aims to enrich our understanding of financial decision-making, promote innovative research methodologies, and encourage dialogue among academics, practitioners, and policymakers.

Dr. Domicián Máté
Prof. Dr. Maria Fekete-Farkas
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • behavioral finance
  • credit default review
  • consumer lending bias
  • loan repayment behavior
  • financial decision making
  • household investors
  • psychological factors
  • sustainable development goals

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Further information on MDPI's Special Issue policies can be found here.

Published Papers (5 papers)

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Research

21 pages, 406 KB  
Article
Investor Emotions and Cognitive Biases in a Bearish Market Simulation: A Qualitative Study
by Alain Finet, Kevin Kristoforidis and Julie Laznicka
J. Risk Financial Manag. 2025, 18(9), 493; https://doi.org/10.3390/jrfm18090493 - 4 Sep 2025
Viewed by 1038
Abstract
Our paper investigates how emotions and cognitive biases shape small investors’ decisions in a bearish market or are perceived as such. Using semi-structured interviews and a focus group, we analyze the behavior of eight management science students engaged in a three-day trading simulation [...] Read more.
Our paper investigates how emotions and cognitive biases shape small investors’ decisions in a bearish market or are perceived as such. Using semi-structured interviews and a focus group, we analyze the behavior of eight management science students engaged in a three-day trading simulation with virtual portfolios. Our findings show that emotions are active forces influencing judgment. Fear, often escalating into anxiety, was pervasive in response to losses and uncertainty, while frustration and powerlessness frequently led to decision paralysis. Early successes sometimes generated happiness and pride but also resulted in overconfidence and excessive risk-taking. These emotional dynamics contributed to the emergence of cognitive biases such as loss aversion, anchoring, confirmation bias, overconfidence, familiarity bias and herd behavior. Emotions often acted as precursors to biases, which then translated into specific decisions—such as holding losing positions, impulsive “revenge” trades or persisting with unsuitable financial strategies. In some cases, strong emotions bypassed cognitive biases and directly drove behavior. Social comparison through portfolio rankings also moderated responses, offering both comfort and additional pressure. By applying a qualitative perspective—not commonly used in behavioral finance—our study highlights the dynamic chain of emotions → biases → decisions and the role of social context. While limited by sample size and the short simulation period, this research provides empirical insights into how psychological mechanisms shape investment behavior under stress, offering avenues for future quantitative studies. Full article
(This article belongs to the Special Issue Behaviour in Financial Decision-Making)
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34 pages, 1602 KB  
Article
Dynamic Spillovers Among Green Bond Markets: The Impact of Investor Sentiment
by Thuy Duong Le, Ariful Hoque and Thi Le
J. Risk Financial Manag. 2025, 18(8), 444; https://doi.org/10.3390/jrfm18080444 - 8 Aug 2025
Viewed by 1244
Abstract
This research investigates the dynamic spillover effects among green bond markets and the impact of investor sentiment on these spillovers. We employ different research methods, including a time-varying parameter vector autoregression, an exponential general autoregressive conditional heteroscedasticity, and a generalized autoregressive conditional heteroskedasticity-mixed [...] Read more.
This research investigates the dynamic spillover effects among green bond markets and the impact of investor sentiment on these spillovers. We employ different research methods, including a time-varying parameter vector autoregression, an exponential general autoregressive conditional heteroscedasticity, and a generalized autoregressive conditional heteroskedasticity-mixed data sampling model. Our sample is for twelve international green bond markets from 3 January 2022 to 31 December 2024. Our results evidence the strong correlation between twelve green bond markets, with the United States and China being the net risk receivers and Sweden being the largest net shock transmitter. We also find the varied impact of direct and indirect investor sentiment on the net total directional spillovers. Our research offers fresh contributions to the existing literature in different ways. On the one hand, it adds to the green finance literature by clarifying the dynamic spillovers among leading international green bond markets. On the other hand, it extends behavioral finance research by including direct and indirect investor sentiment in the spillovers of domestic and foreign green bond markets. Our study is also significant to related stakeholders, including investors in their portfolio rebalancing and policymakers in stabilizing green bond markets. Full article
(This article belongs to the Special Issue Behaviour in Financial Decision-Making)
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23 pages, 692 KB  
Article
The Influence of Religiosity on Muslim Women’s Selection of Fund Providers in Malaysia
by Salim Bouzekouk and Fadillah Mansor
J. Risk Financial Manag. 2025, 18(3), 123; https://doi.org/10.3390/jrfm18030123 - 26 Feb 2025
Cited by 1 | Viewed by 1867
Abstract
The purpose of this study is to analyze the factors influencing the attitudes of women investors in the context of Islamic unit trust funds in Malaysia, with a focus on women’s religiosity and on the perceived religiosity of fund providers. Using the UTAUT [...] Read more.
The purpose of this study is to analyze the factors influencing the attitudes of women investors in the context of Islamic unit trust funds in Malaysia, with a focus on women’s religiosity and on the perceived religiosity of fund providers. Using the UTAUT model, the study examines data from a survey of 263 Muslim women in Malaysia and considers seven key factors: risk aversion, religiosity, price sensitivity, and Islamic financial literacy on the side of the investing women and past performance, perceived religiosity, and perceived risk on the side of the fund providers. The findings indicate that the perceived religiosity of a fund provider has a significant and positive impact on attitude, with positive moderating effects on the women’s own religiosity and Islamic financial literacy, and a negative moderating effect on the women’s price sensitivity. The study also discusses the practical implications of these findings and offers recommendations for fund providers. Full article
(This article belongs to the Special Issue Behaviour in Financial Decision-Making)
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36 pages, 4338 KB  
Article
Credit Choices in Rural Egypt: A Comparative Study of Formal and Informal Borrowing
by Sarah Mansour, Nagwa Samak and Nesma Gad
J. Risk Financial Manag. 2024, 17(11), 487; https://doi.org/10.3390/jrfm17110487 - 29 Oct 2024
Cited by 3 | Viewed by 2489
Abstract
Access to finance is essential for fostering financial inclusion, improving household economic well-being, and stimulating economic growth. However, if not prudently managed, it can become a double-edged sword, increasing the risk of over-indebtedness, particularly among low-income households. This paper investigates the borrowing behavior [...] Read more.
Access to finance is essential for fostering financial inclusion, improving household economic well-being, and stimulating economic growth. However, if not prudently managed, it can become a double-edged sword, increasing the risk of over-indebtedness, particularly among low-income households. This paper investigates the borrowing behavior of rural households in Egypt, exploring whether it is motivated by the optimization of intertemporal consumption or reflects deeper financial vulnerabilities. The study enhances our understanding of rural households’ financial behavior in Egypt and contributes to the literature by introducing perceived general self-efficacy as a key behavioral factor. The paper employs a quantitative methodology using a probit analysis of the Egypt Labor Market Panel Survey to explore the factors affecting the demand for formal loans, informal borrowing, and Rotating Saving and Credit Associations (RoSCAs). The results show that informal credit plays a dominant role in meeting rural households’ financial needs. A significant positive relationship between formal and informal credit suggests they are complementary. Elderly, married, less educated, and poorer individuals are more likely to seek both forms of credit, with employment stability being a key differentiator. Self-efficacy also has a significant positive effect. No significant regional differences are observed, except in the case of informal borrowing, with rural households in Upper Egypt showing less reliance, suggesting that social image may influence financial behavior in this region. The results suggest that demand for credit is driven by economic and financial vulnerability of rural households. The paper highlights key policy implications. First, to enhance participation in formal credit market, credit policies should offer more affordable, tailored credit relevant to starting a business rather than financing consumption, part of which is conspicuous. Second, the low self-efficacy among the rural poor suggests a need for policies that combine credit access with financial literacy and debt management support to prevent over-indebtedness. Full article
(This article belongs to the Special Issue Behaviour in Financial Decision-Making)
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19 pages, 4219 KB  
Article
A Bibliometric Analysis of Borrowers’ Behavior
by Douglas Mwirigi, Mária Fekete-Farkas and Zoltán Lakner
J. Risk Financial Manag. 2024, 17(3), 111; https://doi.org/10.3390/jrfm17030111 - 9 Mar 2024
Cited by 4 | Viewed by 4203
Abstract
Understanding borrowers’ behavior is essential in making lending decisions, strengthening financial inclusion, and alleviating poverty. This research adopts a bibliometric approach to provide an overview of the borrower’s behavior relative to the selected literature. Bibliometric analysis quantifies the impact and quality of scientific [...] Read more.
Understanding borrowers’ behavior is essential in making lending decisions, strengthening financial inclusion, and alleviating poverty. This research adopts a bibliometric approach to provide an overview of the borrower’s behavior relative to the selected literature. Bibliometric analysis quantifies the impact and quality of scientific production. This study reviewed 989 articles obtained from SCOPUS and published from 1987 to 2023. Data were cleaned, formatted, and analyzed using VOS viewer (1.6.19) and the R-Bibliometrix package. The research established an increased interest in borrowers’ behavior among scholars. Nonetheless, it is overshadowed by studies in lending behavior, microfinance, banking, peer-to-peer lending, and fintech. The scholarly focus is mainly on the supply side of the credit industry with little regard to demand-side dynamics, such as borrowers’ decision-making processes, which can affect the performance of credit facilities. This study recommends that further studies on credit facility demand-side dynamics should be carried out to understand the drivers of borrowers’ decisions. Full article
(This article belongs to the Special Issue Behaviour in Financial Decision-Making)
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