Analyzing the Consequences of Investors' Analytical Paralysis in the Capital Market

Objective: Analytical paralysis, also known as analysis paralysis, refers to a state of overthinking or excessive analysis that can hinder decision-making or problem-solving processes. It occurs when an individual becomes so overwhelmed by the abundance of information, options, or possibilities that they struggle to make a choice or take action. In analytical paralysis, individuals may find themselves constantly gathering more data, researching extensively, or considering all possible scenarios before making a decision. They might fear making the wrong choice or worry about potential negative consequences. As a result, they may procrastinate or become indecisive, ultimately getting stuck in a perpetual cycle of analysis without reaching a resolution. This state of paralysis can be detrimental because it delays progress, wastes time and energy, and can cause immense frustration. It can prevent individuals from moving forward and taking necessary steps towards achieving their goals or solving problems efficiently. Breaking free from analytical paralysis often involves learning to prioritize, set clear objectives, and trust one's instincts. It may also help to focus on the most important factors, seek advice or input from others, and consider the potential risks and rewards associated with each option. By acknowledging the limitations of analysis and embracing a balanced approach, individuals can overcome analytical paralysis and make decisions confidently and effectively. This study was conducted with the aim of analyzing the consequences of analytical paralysis in the stock exchange market.



Methods: The statistical population of the qualitative and quantitative research includes university professors (with investment experience in the capital market) and managers of brokerages in Tehran. Therefore, using the purposeful sampling method and relying on the principle of theoretical adequacy, 17 people (people who had the necessary understanding, knowledge and information about the phenomenon under investigation) were selected as sample members in 1401. In the qualitative part, the data collection tool was a semi-structured interview in which experts were asked to freely express their opinions about analytical paralysis by presenting similar questions. It should be acknowledged that the validity and reliability of the data collection tool in the qualitative section was confirmed using content validity and intra-coder and inter-coder reliability, respectively. Also, the data collected in this section were analyzed with the help of coding approach and Atlas.ti software, and the consequences of analytical paralysis in the capital market were identified. According to the nature of the research, the data obtained from the qualitative part were also analyzed and examined in order to obtain final results in the quantitative part. In this section, the fuzzy Delphi approach was used. The data collection tool is a fuzzy Delphi questionnaire whose validity was confirmed through content validity and reliability through inconsistency rate. Regarding the reasons for the methods used in this research, it should be mentioned that in the first phase, the goal was to identify the consequences of analysis paralysis in the capital market, which was done using thematic analysis (review of texts, articles, books, interviews, etc.). On the other hand, in the second phase, the goal was to determine the amount and degree of importance of the mentioned consequences, which was done with the help of the fuzzy Delphi approach

Results: The results show that fourteen factors were identified as the consequences of analytical paralysis in the stock and securities market, which are low productivity, prolonging the decision-making process, not using opportunities, losing time, making inefficient decisions, and waste. Sources are respectively the most important consequences of analysis paralysis in the stock exchange market.

Making inefficient decisions, wasting resources, not using opportunities, increasing threats, losing time, not responding quickly, having constant stress and anxiety, reducing self-confidence, prolonging the decision process, not having the courage to make a decision, becoming obsessive. , low productivity, dominance of partiality in the individual and dependence on others are among the identified consequences of analysis paralysis in the qualitative part of the research. On the other hand, in the quantitative part, the fuzzy Delphi approach was used to obtain a consensus regarding the identified outcomes and their prioritization. Low productivity, prolonging the decision-making process, not using opportunities, losing time, making inefficient decisions and wasting resources are respectively the most important consequences of analytical paralysis in the stock market.

Conclusions: When an investor suffers from analytical paralysis and focuses on the subject too much, he tends to consider all aspects and examines all possible solutions and scrutinizes all the details and looks for the most optimal solution that can make a best decision. It is obvious that this takes time and not only destroys one's energy and strength, but may also delay one's investment decision for days and even months. The delay that has occurred means that despite a lot of effort, the person has practically not gained any profit and benefit, effectiveness and efficiency have not been achieved, and most importantly, he has lost opportunities. The findings of the present study are consistent with the findings of Sharif (2008). In his research, as in the present research, he showed that people who suffer from analysis paralysis do not take advantage of the opportunities that arise and has lost opportunities.