Examining the Effect of Initial Public Offerings on the Behavior and Learning Process of Individual Investors in the Tehran Stock Exchange<br/>

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Examining the Effect of Initial Public Offerings on the Behavior and Learning Process of Individual Investors in the Tehran Stock Exchange

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 58399 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Ebrahimnejad, Ali
Abstract:
Individuals’ cognitive and behavioral biases can be strengthened or weakened by various factors. When these biases manifest in financial markets, they influence trading behavior and portfolio returns of investors, and from a macro perspective, they affect market efficiency. During 2020–2021, some Tehran Stock Exchange brokerage firms automatically placed purchase orders for initial public offerings on behalf of their clients. Observing the returns generated by these IPO purchases can strengthen self attribution bias and foster overconfidence among traders, encouraging more aggressive trades. This study uses transaction level stock market data and a difference in differences statistical model to examine how this type of order placement affects the behavioral biases of retail investors. The findings suggest that these biases are amplified among investors with limited trading experience, while the impact on other investors’ trading behavior is unclear and requires additional research
Keywords:
Behavioral Bias ; Stock Market ; Overconfidence ; Initial Public Offering ; Self-Attribution ; Individual Investors ; Tehran Stock Exchange

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