Department of Management, Faculty of Economic and Administrative Sciences, Ferdowsi University of Mashhad (FUM)
Management/Finance, Department of Management, Faculty of Management, Tehran University
Capital market plays an important role in the economy, by transferring the cash fellow of people who cannot use their money at capital market. Therefore, a good performance of these markets could be a key factor in economic growth, so economic development will be achieved if capital markets work efficiently. On the other hand, due to irrational decisions of investors in the capital market, systematic errors may occur that causes inefficiencies in the market. This paper is aimed at identifying the main biases investors undertake in the capital market. Searching the major internal and external databases (for a period of 2016-1980), we reviewed 64 articles that have used the same statistical analysis about the biases investors undertake in capital markets. Using the CMA2 software, we found that the most significant cognitive biases are: overconfidence, self-reliance and adjustments, representation, self-attribution, conservatism, uncertainty avoiding, mental accounting, current events, shaping, work status, self-control, and emotional biases are : optimism, loss aversion and regret aversion.