نصير فليح

Investment decision-making is inherently uncertain, requiring individuals to interpret incomplete information, eva‎luate probabilistic outcomes, an‎d commit resources without fully knowing future market conditions. Behavioral finance argues that such environments amplify cognitive biases, particularly expectation-based distortions. Among these, optimism bias—defined as the tendency to overestimate favorable outcomes an‎d underweight unfavorable possibilities—may shape how individual investors form investment-oriented decisions. At the same time, investors are heterogeneous; demographic an‎d experiential characteristics may condition when an‎d for whom optimism becomes more behaviorally influential. This thesis examines the effect of optimism bias on investment decision-making among individual investors in Iraq an‎d investigates whether this relationship differs across subgroups defined by gender, age, an‎d investment experience. Using a quantitative, cross-sectional survey design, data were collected from 183 investors. Optimism bias an‎d investment decision-making were operationalized as reflective latent constructs measured via established multi-item scales. The hypotheses were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS, an‎d subgroup differences were assessed through Multi-Group Analysis (MGA). The measurement model demonstrated strong internal consistency reliability an‎d satisfactory convergent an‎d discriminant validity. Structural model results indicated a positive an‎d statistically significant effect of optimism bias on investment decision-making (β = 0.541), with substantial explanatory contribution (R² = 0.293; f² = 0.414). MGA results revealed meaningful heterogeneity: the optimism bias → decision-making relationship was significantly stronger for females than males, an‎d stronger for inexperienced than experienced investors. Age-based differences were also observed, with a stronger effect among younger investors than older investors, though the magnitude of this moderation was comparatively smaller. Predictive assessment using PLSpredict supported out-of-sample predictive relevance for the endogenous construct. Overall, the findings suggest that optimism bias is a meaningful psychological driver of investment decision-making tendencies in this context an‎d that its behavioral influence varies systematically across demographic an‎d experience-based groups. The study contributes to behavioral finance by integrating optimism bias an‎d investment decision-making within a latent-variable SEM framework an‎d by providing evidence on subgroup boundary conditions using MGA in an under-studied market setting.

سوگيري خوش‌بيني , خوش‌بيني سرمايه‌گذاران , مالي رفتاري , تصميم‌گيري در سرمايه‌گذاري

Optimism bias , Investor optimism , Behavioral finance , Investment decision-making , Individual investors

Naseer Flayyih

Dr. MohammadReza Parsanejad