Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market

Jacob Niyoyita Mahina; Wilson Bashaija

doi:doi:10.11648/j.ebm.20180403.11

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Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market

Jacob Niyoyita Mahina, Wilson Bashaija

Published in European Business & Management (Volume 4, Issue 3)

Received: 1 April 2018 Accepted: 26 April 2018 Published: 12 July 2018

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Abstract

Behavioural finance is still a new arear which attempt to better understand and explain how emotional and cognitive errors influence investment on the stock markets. The main objective of this study was to establish the effect of confirmatory bias on investment in the Rwanda Stock Exchange. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. A pilot test was undertaken by carrying out a small scale trial run of the research instrument. Data analysis involved the use of descriptive and inferential statistics. A Linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in RSE. The results confirmed that there was a significant positive linear relationship between confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from confirmatory bias in investment in stock markets. The study recommends that investors should be keen to identify such bias to increase their rationality in stock trading.

Published in	European Business & Management (Volume 4, Issue 3)
DOI	10.11648/j.ebm.20180403.11
Page(s)	67-74
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Confirmatory Bias, Investment, Rwanda, Stock Exchange

References

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APA Style

Jacob Niyoyita Mahina, Wilson Bashaija. (2018). Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market. European Business & Management, 4(3), 67-74. https://doi.org/10.11648/j.ebm.20180403.11

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Jacob Niyoyita Mahina; Wilson Bashaija. Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market. Eur. Bus. Manag. 2018, 4(3), 67-74. doi: 10.11648/j.ebm.20180403.11

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Jacob Niyoyita Mahina, Wilson Bashaija. Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market. Eur Bus Manag. 2018;4(3):67-74. doi: 10.11648/j.ebm.20180403.11

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@article{10.11648/j.ebm.20180403.11,
  author = {Jacob Niyoyita Mahina and Wilson Bashaija},
  title = {Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market},
  journal = {European Business & Management},
  volume = {4},
  number = {3},
  pages = {67-74},
  doi = {10.11648/j.ebm.20180403.11},
  url = {https://doi.org/10.11648/j.ebm.20180403.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20180403.11},
  abstract = {Behavioural finance is still a new arear which attempt to better understand and explain how emotional and cognitive errors influence investment on the stock markets. The main objective of this study was to establish the effect of confirmatory bias on investment in the Rwanda Stock Exchange. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. A pilot test was undertaken by carrying out a small scale trial run of the research instrument. Data analysis involved the use of descriptive and inferential statistics. A Linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in RSE. The results confirmed that there was a significant positive linear relationship between confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from confirmatory bias in investment in stock markets. The study recommends that investors should be keen to identify such bias to increase their rationality in stock trading.},
 year = {2018}
}

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TY - JOUR
T1 - Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market
AU - Jacob Niyoyita Mahina
AU - Wilson Bashaija
Y1 - 2018/07/12
PY - 2018
N1 - https://doi.org/10.11648/j.ebm.20180403.11
DO - 10.11648/j.ebm.20180403.11
T2 - European Business & Management
JF - European Business & Management
JO - European Business & Management
SP - 67
EP - 74
PB - Science Publishing Group
SN - 2575-5811
UR - https://doi.org/10.11648/j.ebm.20180403.11
AB - Behavioural finance is still a new arear which attempt to better understand and explain how emotional and cognitive errors influence investment on the stock markets. The main objective of this study was to establish the effect of confirmatory bias on investment in the Rwanda Stock Exchange. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. A pilot test was undertaken by carrying out a small scale trial run of the research instrument. Data analysis involved the use of descriptive and inferential statistics. A Linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in RSE. The results confirmed that there was a significant positive linear relationship between confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from confirmatory bias in investment in stock markets. The study recommends that investors should be keen to identify such bias to increase their rationality in stock trading.
VL - 4
IS - 3
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Author Information

Jacob Niyoyita Mahina

Department of Business Studies, University of Tourism, Technology and Tourism, Kigali, Rwanda
Wilson Bashaija

School of Entrepreneurship, Jomo Kenyatta University of Agriculture Technology, Nairobi, Kenya

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Jacob Niyoyita Mahina, Wilson Bashaija. (2018). Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market. European Business & Management, 4(3), 67-74. https://doi.org/10.11648/j.ebm.20180403.11

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ACS Style

Jacob Niyoyita Mahina; Wilson Bashaija. Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market. Eur. Bus. Manag. 2018, 4(3), 67-74. doi: 10.11648/j.ebm.20180403.11

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Jacob Niyoyita Mahina, Wilson Bashaija. Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market. Eur Bus Manag. 2018;4(3):67-74. doi: 10.11648/j.ebm.20180403.11

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@article{10.11648/j.ebm.20180403.11,
  author = {Jacob Niyoyita Mahina and Wilson Bashaija},
  title = {Measuring the Effect of Confirmatory Bias on the Level of Investment at the Rwandan Stock Market},
  journal = {European Business & Management},
  volume = {4},
  number = {3},
  pages = {67-74},
  doi = {10.11648/j.ebm.20180403.11},
  url = {https://doi.org/10.11648/j.ebm.20180403.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20180403.11},
  abstract = {Behavioural finance is still a new arear which attempt to better understand and explain how emotional and cognitive errors influence investment on the stock markets. The main objective of this study was to establish the effect of confirmatory bias on investment in the Rwanda Stock Exchange. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. A pilot test was undertaken by carrying out a small scale trial run of the research instrument. Data analysis involved the use of descriptive and inferential statistics. A Linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in RSE. The results confirmed that there was a significant positive linear relationship between confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from confirmatory bias in investment in stock markets. The study recommends that investors should be keen to identify such bias to increase their rationality in stock trading.},
 year = {2018}
}

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