Behavioural Finance and Infrastructure Project Investments
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Abstract
Human behaviours are very complex and even rational investors can succumb to pressures from behavioural aspects while making investment decisions [1]. Very common influencing behavioural aspects include overconfidence, loss aversion, anchoring etc. Investors arrive at a decision after considering the results from all the alternative choices. The Classical financial theories suggest that investors arrive at the conclusion that decision-making processes of human beings include three points of view: social, cognitive and normative. The normative view, including the logic of decision taking, recognizes that individuals do not always make sound decisions. There are positive and negative influences of behavioural aspects. Positive are self-awareness, creativity, efficiency etc and negative could be redundancy, fear etc
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