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

Document Type : Research Paper

Author

Department of Accounting, Faculty of Management and Economics, Lorestan University, Khorramabad, Iran.

10.22103/jak.2024.23011.4018

Abstract

Objective: This study aims to investigate and analyze the consequences of investors’ analysis paralysis within the context of the Iranian capital market. The research seeks to identify the behavioral and economic implications of excessive analytical deliberation that leads to decision-making inertia among investors.
 
Method: In the qualitative phase, 17 experts—including university professors and capital market managers—were selected through purposeful sampling based on the principle of theoretical saturation. Data were collected via semi-structured interviews, and the validity and reliability of the data were confirmed using content validity and both intra-coder and inter-coder reliability checks. For data analysis, a thematic analysis approach—involving the review of texts, articles, and interviews—was employed, along with a coding process using Atlas.ti software. In the quantitative phase, data were collected through a Delphi questionnaire, and to rank and determine the relative importance of the indicators, the fuzzy Delphi approach was utilized.
 
Results: The results led to the identification of fourteen consequences of analysis paralysis (including the most important of them: prolonged decision-making process, low productivity, failure to seize opportunities, loss of time, inefficient decision-making, and waste of resources) in the capital market.
 
Conclusion: Given the far-reaching economic implications of analysis paralysis for individual investors and the broader financial system, managing and preventing this phenomenon is essential. The value of this article lies in its contribution to expanding the literature on the phenomenon of analysis paralysis and addressing its consequences within society, an issue that has not yet been explored in domestic research.

Keywords

References

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History

  • Receive Date: 25 February 2024
  • Revise Date: 29 April 2024
  • Accept Date: 15 May 2024

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