Behavioral Finance: The Relationship Between Personality Traces And Behavioral Biases


  • Dinorá Baldo de Faveri Universidade do Estado de Santa Catarina
  • Paulo de Souza Knupp Universidade Federal de Santa Catarina


Studies on risk decision making were based on Expected Utility Theory (TUE). However, empirical evidence from behavioral finance has shown that individuals commit biases in the decision- -making process, so that decisions are not always aimed at optimizing wealth. Aiming to contribute to the development of this theme, this research analyzed the relationship between personality traits and behavioral biases from a near-experiment with 174 Brazilian postgraduate students. The results of the research indicate that two personality traits (conscientiousness and affability) have a significant and positive relationship with the bias ‘misconception of probability’, while only the trait of conscientiousness was related to the bias of the framework. Another relevant observation of this study is that the degree of instruction (masters or doctorates) was not related to the biases analyzed, indicating that these occur independently from the postgraduate level of the individuals. These results, in addition to collaborating with the development of the topic, are useful for investors to be aware that their personal characteristics make them more susceptible to heuristics (mental shortcuts).

Keywords: limited rationale, Theory of Prospects, heuristics of judgment, decision biases.