Individuals’ decision on investment in stock market is affected by so many factors which are influenced by their day to day affairs. Behavioural biases may creap into their investment decisions such as Representativeness Bias, Illusion of Control Bias, Hindsight Bias, Cognitive Dissonance Bias, Self-attribution Bias, Loss Aversion Bias, Regret-Aversion Bias, Over-optimism Bias and Herding Bias ...

Abstract: Adequately considering the intangible value of Information and Communication Technology (ICT) investments has been problematic for as long as organisations have been making ICT investment decisions. This paper presents a framework for considering the intangible capital value of ICT investments. The framework applies the tripartite model of intangible resources, as proposed by the Aust...

When making capital investment decisions organizational leaders are trained to consider the financial return on investment. Yet, the same expectation typically does not exist for investments in leadership training. We suggest that decisions regarding leadership training and development ought to use a similar approach as the process leads to organizations incurring cost for an anticipated benefi...

This research examines the affect of overconfidence on the entrepreneurial investment choices of individuals. We argue that individual overconfidence is associated with more aggressive entrepreneurial investment decisions. We show that the propensity of an individual to begin startup activities is positively associated with the individual's level of overconfidence. Furthermore, overconfidence i...

Developing a complex software system involves decisions about how to allocate a limited resource budget among a collection of costly software alternatives (such as technologies or analysis techniques) that have uncertain future benefits. Very little quantitative guidance is currently available to make these decisions. We suggest that these allocation problems are naturally viewed in the powerfu...

The paper studies agents’ investment decisions between general and speci...c investments under di¤erent ownership structures in a thin, decentralized market where each agent’s decision a¤ects the decisions and welfare of other (otherwise unrelated) agents mainly through indirect market linkages. The paper demonstrates that “excess competition among investors,” in every equilibrium, will lead to...

In this paper, we deal with generation capacity expansion under long-term uncertainties regarding fuel prices and CO2 emissions regulation. We present a model based on stochastic dynamic programming which gives optimal generation investment planning for perfectly competitive power markets. It is applied to the US continuous electricity market with DOE's fuel price scenarios. We show that taking...

Previous research has argued that debt financing affects equityholders’ investment decisions, producing substantial inefficiency. This paper shows that the size of this inefficiency depends on the degree of investment reversibility. In a dynamic model of financing and investment, the paper provides an upper bound for the inefficiency produced by debt financing. The upper bound is decreasing in ...

This paper develops a framework to link the expected utility analysis to real options models in order to capture the joint effects of risk aversion and irreversibility associated with real investments. It aims at modifying the theory of investment under uncertainty by incorporating decision makers’ risk preferences and allows explicitly analyzing the impacts of risk aversion, uncertainty and ir...

We study the choice between public and private debt in a firm’s marginal financing decision and its effects on corporate investment. To do so, we build a dynamic model of investment and financing decisions in which firms can choose not only the amount but also the type of debt to issue to finance investment. The paper shows how various firm and industry characteristics, such as liquidation cost...