Investor’s intrinsic motives and the valence of word-of-mouth in sequential decision-making: modeling of triple serial mediation
Faculty / School
School of Business Studies (SBS)
Department of Finance
Was this content written or created while at IBA?
Journal of Behavioral Finance
Word-of-mouth, Self-motives, Social-motives, Behavioral finance, Social finance, Risk-attitude, Sequential risk-taking
Finance | Finance and Financial Management | Interpersonal and Small Group Communication | Mass Communication
Word-of-Mouth (WoM) is a socially embedded process, and investors engage in social considerations to achieve self-motives. Investors attempt to share negative WoM (NWoM) to emotionally connect (self-affirm) to strengthen existing social ties following prior losses. In contrast, investors attempt to share positive WoM (PWoM) to self-enhance to attract others into developing new social ties. Thereby, this study aims to predict the impact of prior losses or gains on investors’ later decisions by engaging in the valence of WoM to achieve different underlying self-motives and social-motives. This study used experimental data and employed PROCESS tool model 6 to check the validity of the proposed triple serial mediation model. Findings support the viability of the triple mediation model that investors seek to achieve different underlying self-motives and social-motives manifested in PWoM or NWoM, following prior gains or losses. Investors seek to self-affirm by strengthening components of social-motives through engaging in NWoM, following prior losses. While investors seek to self-enhance to develop components of social-motives through sharing PWoM, following prior gains. Findings provide significant implications for researchers, managers, financial advisors, and analysts. Researchers, managers, and analysts can incorporate investors’ intrinsic factors in traditional economic models to better predict investors’ economic behavior. Financial advisors need to understand self-motives and social-motives that change clients’ risk attitude and frame investment advice to achieve particular clients’ self-motives and social-motives.
JEL CLASSIFICATION: G41, G11
Scopus, Web of Science - Social Sciences Citation Index (SSCI)
Journal Quality Ranking
0.576; Finance 75/96 , Economics 256/347
Fawad Ahmad (2023) Investor’s Intrinsic Motives and the Valence of Word-of-Mouth in Sequential Decision-Making: Modeling of Triple Serial Mediation, Journal of Behavioral Finance, DOI: 10.1080/15427560.2022.2138392
Ahmad, F. (2023). Investor’s intrinsic motives and the valence of word-of-mouth in sequential decision-making: modeling of triple serial mediation. Journal of Behavioral Finance, 1-13. Retrieved from https://ir.iba.edu.pk/faculty-research-articles/212