Prospect Theory in the financial decision-making process. An empirical study of two Argentine Universities

Lima

Conferencia; XXI International Finance Conference - Retroactivación económica e impacto financiero en la era post COVID-19; 2021

Universidad del Pacífico

1. Introduction and purpose of the researchBehavioral finance as a sub discipline of behavioral economics is finance incorporating findingsfrom psychology and sociology into its theories. Behavioral finance models are usually developed to explain investor behavior or market anomalies when rational models provide no sufficientexplanations.The purpose of this research is to provide empirical evidence of the use of the Prospect Theory basic assumptions in the Argentine context. Particularly, we analyze the financial decision-making process in students of the economic-administrative academic area of two Universities, one publicthe National University of Cordoba (UNC), and one private, the Catholic University of Cordoba (UCC), both in the city of Cordoba, Argentina.In that context, this study represents an extension of a research project conducted by our research group where we have carried out similar experiments in different Universities from Mexico, Brazil and Colombia. The nature of this extension responds to our interest of analyze if the financial decisions taken by the participants are different responding to geographic, cultural, social andeconomic particularities in each University and country Thus, the main contribution of this paper is to provide additional empirical evidence of the financial decision-making process in another geographic, cultural, social, and economic context different from our previous research that allow us to contribute to the generalizations of the framework of these alternatives financial and economics approaches under the light of the scope andlimitations of this document.