Who Governs Fear and Greed? - Exploring the Impact of Psychological Trauma on Investment and Financial Behavior

DOI

10.2991/978-94-6239-801-6_52How to use a DOI?

Keywords

Psychological Trauma; Behavioral Finance; Securities Investment; Irrational Behavior

Abstract

With the development of finance research, the assumption of rationality in traditional economics has been modified by behavioral finance. Although behavioral finance has identified many biases, the psychological origins of these biases, such as traumatic experiences, personality traits, and emotional patterns, have not been well elucidated. In particular, as a key experience in shaping cognitive and emotional patterns, how psychological trauma systematically affects financial behavior is still lacking in empirical evidence. The goal of this study is to draw the core conclusion that the persistent cognitive affective imprinting caused by psychological trauma will affect investment decisions and performance by exacerbating classical behavioral finance biases. Through the questionnaire survey of 40 investors, through quantitative analysis and qualitative analysis as the supplement, this research measured their post-traumatic stress tendency, main behavioral deviation, investment preference and self-rated performance, finally, it is concluded that post-traumatic stress disorder (PTSD) propensity has a significant positive effect on the strength of the disposition effect. The purpose is to fill this part of the research gap and enrich the theoretical dimension of behavioral finance.

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  - Shengwei Wu
PY  - 2026
DA  - 2026/10/23
TI  - Who Governs Fear and Greed? - Exploring the Impact of Psychological Trauma on Investment and Financial Behavior
BT  - Proceedings of the 2026 2nd International Conference on Financial Innovation and Marketing Management (FIMM 2026)
PB  - Atlantis Press
SP  - 484
EP  - 494
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-801-6_52
DO  - 10.2991/978-94-6239-801-6_52
ID  - Wu2026
ER  -