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Fadhila Hamza, Anis Jarboui



This study examines the reasons of investor’s escalatory behavior in firm’s investment decision. It shows the possible influence of three closely related features which are: firm’s financial indicators, investor’s risk profile, and investor’s psychology commitment level, on a firm’s investment decisions escalation. This study aims to provide evidence as to whether investor considers the financial and risk’s perception features (financial strength and risk profile) in his escalatory behavior while he notes a high psychology commitment level. The proposed model of this paper uses GLM univariate data analyses to examine this relationship. Investor’s risk profile and his psychology commitment level have been measured by means of a questionnaire comprising several items. As for the selected sample, it has been composed of some 360 Tunisian individual investors. Our results have revealed that investors pay more attention to keep their psychology comfort than their financial comfort. It exposed the importance of the investor’s commitment bias and its risk perception in explaining his investment decision escalation. Moreover results shows that there is strong and significant empirical relationship linking the investment decision escalation and the interaction effects between the three independent variables. This means that, in practice, investors consider the three factors simultaneously.

Keywords: Commitment Level, Escalatory Behavior, Investor’s Risk Profile, Firm’s Financial Strength Indicator, Investment Level

How to cite this paper: Hamza, F., & Jarboui, A. (2012). Investor’s psychology commitment level and escalatory behavior in investment decision. Corporate Ownership & Control, 9(4-4), 369-380.