The Logic and Analysis of Irrational Investment Behavior

DOI

10.2991/978-94-6239-801-6_56How to use a DOI?

Keywords

Irrational Behavior; Investment Decision; Meme Stock

Abstract

Purpose/Background: The purpose of this study is to apply the case study method and examine the linkage mechanism of irrational investors’ behavior based on the case of the 2021 U. S. GameStop short squeeze event. The reason for selecting the case is based on the fact that the stimulus checks of the U. S. government during the event could be used as a sample of ‘mental accounting. Method/Case: The purpose of this study is to explore the manner in which this ‘windfall gain’ created an overconfidence in retail investors, which, with the assistance of ‘mental accounting, ‘ took the extreme form of a ‘disposition effect, ‘ or the tendency to hang on to stocks for an extended period of time without selling them, even in the face of a significant price fall. Findings/Analysis: The methods that this study will employ are the review of the empirical data provided by the media and the discussions on the social platform in an attempt to build an integrated model to evaluate the interactive logic and impact of the three major biases at different stages. Conclusion/Implications: The proposed framework for the article is as follows: first, introduce the background of the GameStop Corp. event and the theoretical basis of the three major biases; second, use evidence related to stimulus checks to focus on analyzing the linkage mechanism among the biases and construct a model; finally, compare the empirical results of the case.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Zechen Li
AU  - Yixuan Zhang
PY  - 2026
DA  - 2026/10/23
TI  - The Logic and Analysis of Irrational Investment Behavior
BT  - Proceedings of the 2026 2nd International Conference on Financial Innovation and Marketing Management (FIMM 2026)
PB  - Atlantis Press
SP  - 521
EP  - 530
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-801-6_56
DO  - 10.2991/978-94-6239-801-6_56
ID  - Li2026
ER  -