[CLSTR]
< Back to situations

Monitor this situation.

[SITUATION] · [ACTIVE] · [BUSINESS]

2 clusters · 4 sources · 1 days · First seen · Last updated

Psychological influences on consumer and investor behavior

Overview

Psychological pressures and cognitive biases significantly influence the decision-making processes of both retail investors and consumers.

In financial markets, investors often struggle with emotional decision-making and overtrading. Research suggests that highly active traders frequently underperform the market due to excessive confidence. Specific cognitive errors, such as loss aversion, herd mentality, and confirmation bias, contribute to a situation where approximately 70 percent of retail investors lose money despite long-term market growth.

In the e-commerce sector, retailers employ pressure tactics to create urgency, including countdown timers and claims of low stock. An investigation by the European Commission found that 18 percent of checked retailers used such pressure techniques, with over half of those instances being deemed misleading. Furthermore, many retailers fail to provide clear explanations regarding price comparisons.

Entities

Swissquote · GameStop · Novartis · Warren Buffett · Nestlé

Timeline

  1. 3 days ago

    [BUSINESS] 2 sources
    Psychological biases and value creation in stock investing

    Retail investors often face losses due to psychological biases like loss aversion and herd mentality, despite the stock market's capacity for value creation through corporate growth.

  2. 3 days ago

    [BUSINESS] 2 sources
    Consumer and investor decision-making under psychological pressure

    Investors and online shoppers are increasingly targeted by psychological tactics, including market timing traps and e-commerce pressure tools like fake countdowns and misleading price comparisons.

Sources

finanzen.net · finex.cz · liebefinanzen.ch · smartmania.cz