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Behavioural Finance and Accounting (BFA)
Home > Research > Behavioural Finance and Accounting

Behavioural Finance and Accounting (BFA)

The Behavioural Finance and Accounting Research Group (BFA) was founded in 2017 with the aim to encourage and attract research on cognitive and economic decision-making pertaining to financial markets and the preparation and interpretation of financial statements. The Group prides itself on collaborative research between academics and students across the globe. A key aspect of BFA is applying behaviour research to real-world contexts by taking social and psychological theory on decision making and assessing its validity in organisational and individual financial decision making. 

The members of BFA welcome interest from academics who are wanting to pursue collaborative research or potential PhD candidates in the fields of Behavioural Finance or Behavioural Accounting.  


Below is a list of recent publications produced by BFA members:

  • This study explores the relationship between financial literacy, behavior and attitude, and retirement savings decisions. Members of a South African tertiary institution’s retirement fund were surveyed and multistage multivariate regression and mediation analyses showed that developing and conforming to a retirement plan positively influenced financial attitude and behavior. This indicates that interventions should focus on the specific behaviors which drive retirement planning, rather than financial literacy in isolation. Use of formal tools such as consulting with a financial planner also increases the relative risk of successful retirement planning. This presents a tangible and linear approach towards improved financial behavior.


  • Tahir, S. T., Richards, D. W. & Ahmed, A. D. Financial literacy, attitudes, and financial satisfaction: an assessment of credit card debt-taking behavior of Australians. Financial Services Review. 28(4), 273-301

    Unpaid credit card debt can be problematic; people should avoid it where possible. Unlike prior studies, this paper examines the relative strength of the association of financial literacy, attitude towards balancing spending and savings, and financial satisfaction with credit card debt-taking behavior by analyzing the 2016 wave of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. We find that higher financial literacy is associated with less credit card debt. However, incorporating the other factors reduces this relationship. Our results advise policy-makers to include components in the financial literacy curricula which encourage savings attitude to reduce problematic debt-taking.

  • Richards, D., Willows, G.D. (2019). Monday mornings: Individual investor trading on days of the week and times within a day. Journal of Behavioral and Experimental Finance. 22, 105-115.

    Individual investors’ demand for trading activity will vary over time according to their availability and desire to trade. Academic research has primarily investigated market wide trading activity, showing low trading activity on Mondays and high activity at the start and end of each day. It remains unknown whether individual investors’ trading behavior mimics these market patterns. Instead research on individual investors shows that they overtrade in general and are less likely to trade losses. We research trading activity for 7 200 UK investors, finding these investors actually prefer trading on Mondays and trade in a W-shaped intraday pattern. Further investigation revealed that investors increased their selling of losses on Monday mornings, suggesting investors utilize spare time to process difficult trading decisions.

    Associated news article

  • Bashall, J; Willows, GD; West, D (2018). The Extent to Which Professional Advice Can Reduce the Disposition Effect: An Emerging Market Study. Journal of Emerging Market Finance. 17(2), 1-21.

    This study tests for the disposition effect in South Africa across two classes of non-professional investors: those acting in their own capacity and those acting with the assistance of professional investment advisors. The trade history of 4,840 investor accounts from a South African stockbroker was analysed over the 5-year period from October 2008 to October 2013. The results showed that individual investors in South Africa exhibit the disposition effect. However, investors acting with the assistance of professional advisors show the effect to a lesser extent which was found to be rationally justifiable on the grounds of portfolio rebalancing

  • Richards,D. W. Fenton-O'Creevy, M., Rutterford, J., Kodwani D.G. (2018). Is the disposition effect related to investors’ reliance on System 1 and System 2 processes or their strategy of emotion regulation? Journal of Economic Psychology. 66, 79-92

    We report research on investor susceptibility to the disposition effect, a financial decision-making bias where investors have a greater propensity to realize gains than realize losses.  Despite theoretical arguments for the influence of emotions, research on susceptibility to this bias, on real investors, has relied primarily on socio-demographic explanations. Using investors’ trading records from a UK sample, we measure their susceptibility to the disposition effect and assess, through a questionnaire, their reliance on Systems 1 and 2 cognitive processes and use of two emotion regulation strategies. Investors with higher reliance on System 1 processes have greater disposition effect, but reliance on System 2 processes is not related to the disposition effect. Investor reliance on reappraisal reduces their disposition effect. However, the use of expressive suppression does not show a statistically significant relationship with this bias. These results suggest that investors’ intuitive emotional reactions explain susceptibility to bias, and that effective strategies of regulating emotions enable this bias to be overcome.

  • Richards, D.W.; Willows, G.D. (2018). Who Trades Profusely? The Characteristics of Frequent Trading Individual Investors. Global Finance Journal. 35, 1-11.

    Research has shown that investors trade too frequently, and that this overtrading lowers investment return. This paper examines the characteristics of investors who trade frequently. Multivariable regression analysis of over three years of trading data from 7200 UK investors enabled identification of numerous characteristics significantly and positively associated with frequent trading. These were male gender, younger age, use of stop losses and use of multiple mediums of trading, including the internet, the telephone and an advice team. In addition, the research revealed that trading frequency is positively skewed, in that a small proportion of investors are responsible for the majority of the trading with the highest cumulative value. The results are of practical value to policy makers that want to reduce investors' trading frequency because they outline that a small minority of investors need be targeted.

    Associated news article

  • D.W.; Rutterford, J. Kodwani, D. & Fenton- O'Creevy (2017). Stock market investors' use of stop losses and the disposition effectThe European Journal of Finance, 23:2, 130-152.


    The disposition effect is an investment bias where investors hold stocks at a loss longer than stocks at a gain. This bias is associated with poorer investment performance and exhibited to a greater extent by investors with less experience and less sophistication. A method of managing susceptibility to the bias is through use of stop losses. Using the trading records of UK stock market individual investors from 2006 to 2009, this paper shows that stop losses used as part of investment decisions are an effective tool for inoculating against the disposition effect. We also show that investors who use stop losses have less experience and that, when not using stop losses, these investors are more reluctant to realise losses than other investors.

Current research projects

Below is a brief listing of current research projects being undertaken by BFA members:

  • Disposition effect amongst traders on the ALSI
  • Disposition effect and trading commissions
  • Diversification bias and concentration of risk by fund managers
  • Behavioural bias mitigation for financial planners
BFA Members  
Picture of Dr Gizelle D. Willows

Dr Gizelle D. Willows

College of Accounting, UCT, Cape Town, South Africa

Staff profile.

Contact: gizelle.willows@uct.ac.za

Picture of Dr Daniel

Dr Daniel W. Richards

School of Administrative Studies, York University, Toronto, Canada

Staff profile.

Contact: danwrich@yorku.ca