TITLE:
Financial Behavior during COVID-19: Cognitive Errors That Can Define Financial Future
AUTHORS:
Monica Dita Pravita Widya Putri, Chaoyi Xu, Larsey Naphtali Akwetteh
KEYWORDS:
Behavioral Finance, Human Psychology, COVID-19 Pandemic, Financial Crisis
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.8 No.10,
October
29,
2020
ABSTRACT: Purpose: The purpose of this study is to determine the
economic effects caused by the crisis impact of the COVID-19 pandemic. Methodology: We explored various kinds of literature from various
journals to find out the level of trust and financial behavior of the public
during the COVID-19 pandemic. Results and findings: The phenomena that occurred during the crisis due to
the COVID-19 pandemic, such as excessive volatility and the confidence of
unaffected financial institutions, cannot be explained through the traditional
market paradigm. In this paper, we explore this phenomenon from a behavioral
finance perspective and discuss some relevant cognitive errors and biases
during and after the crisis due to the COVID-19 pandemic. Limitation: The study explains by exploring the phenomenon from
the viewpoint of financial behavior and discussing some of the relevant
cognitive errors during and after the crisis. We only look at each phenomenon
from a psychological point of view and consider its relevance to financial
institutions and markets as well as the financial crisis due to the COVID-19
Pandemic.