Debunking the Monday Irrationality through the External Affection of Investors

  • Rayenda Brahmana Universiti Malaysia Sarawak
  • Chee-Wooi Hooy Universiti Sains Malaysia
  • Zamri Ahmad Universiti Sains Malaysia
Keywords: Irrationality, Investors

Abstract

This study aims to reveal the mechanism of the influences of the full moon and high temperatures on investors’ Monday irrationality. In contrast to other studies, this research was built under a retroductive approach by using a time series quasi experimental study. Investors were directly assessed for their irrationality by using an adapted psychometric test on 4 occasions. The results indicate that there were indeed effects of the full moon and high temperatures on investors’ irrationality. Because the full moon and high temperatures frequently occurred on Mondays, it is most probably those two variables that were the drivers of the Monday irrationality. In the end, we concluded that the rational behaviour assumption can no longer be held. Instead of rationality, the investors were quasi rational. The utility function of Von Neumann-Morgenstern in decision making has to be replaced by the hedonic utility.

Author Biographies

Rayenda Brahmana, Universiti Malaysia Sarawak

Senior Lecturer at the Faculty of Economics and Business, Universiti Malaysia Sarawak (UNIMAS). He obtained his M.Sc. (2007) in Investment from University of Birmingham, and Ph.D. (2013) degree majoring in Behaviuoral Finance from Universiti Sains Malaysia. He is also associate managing editor for International Journal of Business and Society (Scopus), and research fellow at UNIMAS Business, Economics, and Finance Forecasting Centre. His research area is corporate strategy, behavioural finance, experimental economics, and social economics. Until now, he received 8 research grants and 3 consultancy projects. At present, Brahmana has published more than 50 referred journal articles in various international journals and international proceedings.

Chee-Wooi Hooy, Universiti Sains Malaysia

Associate Professor at School of Management, Universiti Sains Malaysia. He earned his Ph.D. (2008)  from University of Malaya. He has done research actively in the area of international and corporate finance; where he has published 4 book and many articles in international journals, including in Asian Economic Journal, Emerging Market Review, Journal of Policy Modeling, The British Accounting Review, The Manchester School and The North America Journal of Economics and Finance. He is the co-editor for Asian Academy of Management Journal of Accounting and Finance, a Scopus cited journal, and the managing editor of Capital Market Review, the official journal of Malaysian Finance Association, sponsored by Bursa Malaysia. Hooy was visiting scholar at Columbia University, Monash University, Chinese University of Hong Kong and Pusan National University.

Zamri Ahmad, Universiti Sains Malaysia

Lecturer in Finance at the School of Management, Penang, Malaysia. He earned his Ph.D. (1998) from the University of Newcastle upon-Tyne in the United Kingdom. He has written many articles related to behavioral finance, capital market and investment in various journals.

References

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Published
2016-02-19
How to Cite
Brahmana, R., Hooy, C.-W., & Ahmad, Z. (2016). Debunking the Monday Irrationality through the External Affection of Investors. Gadjah Mada International Journal of Business, 18(1), 83-105. Retrieved from https://journal.ugm.ac.id/v3/gamaijb/article/view/15546
Issue
Vol 18 No 1 (2016): January-April
Section
Articles

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