The Effect of Phantasy on Fantasy and Risky Investment Intention: Mediating the Role of Positive and Negative Emotions
Hatice Nayman Hamamci, Selim ArenAbstract
Research background
It is a psychologically difficult and corrosive process for investors to make decisions in financial markets where uncertainty prevails. Uncertainty triggers different emotions such as fear, anxiety and hope in investors. For this reason, trading in financial markets requires controlling emotions.
Purpose
In this study, the mediating role of positive and negative emotions in the effect of phantasy on both fantasy and risky investment intention was investigated.
Research methodology
The pilot data of the study consists of 204 participants and the original data consists of 831 participants. The data were collected from Turkey with convenience sampling using an online questionnaire. The fantasy variable was developed within the scope of this study. Accordingly, an exploratory factor analysis was performed for this variable. A confirmatory factor analysis was performed for other variables, and finally, the research model was tested with structural equation modeling (SEM).
Results
According to the findings, it was seen that phantasy positively affects risky investment intention and fantasy. Considering the mediation effects, there was partially a mediating effect of positive emotions on the effect of phantasy on risky investment intention, while the mediating effect of negative emotions was not found. It was also found that both positive and negative emotions have a partial mediating effect on the effect of phantasy on fantasy.
Novelty
The effect of emotions on the decision-making process was reported by some researchers in the past. In this study, conscious and unconscious processes were included in the model as well as emotions, thus expanding the scope and providing a better understanding of investors’ decision-making processes. In addition, the newly developed fantasy scale will also make a significant contribution to the literature.