A Cognitive DSS for Investment Decision Making: Challenges & Opportunities

Working PaperAuthorsPublish Date
13 Gokul Bhandari
Khaled Hassanein
Nov. 2004

Recent findings from behavioral finance indicate that cognitive support is critical to investors as their psychological biases strongly influence their investment decisions. This paper proposes a conceptual model of investor misjudgment based on the three-stage human information-processing model. The importance of such a model is that it classifies investment-related biases as being long-term or short-tem and consequently, provides a way to implement debiasing mechanisms in DSS. The paper then suggests an architecture for building such a cognitive investment DSS using recent computational technologies for human attitudes modeling. This research work fills a gap in the current IS literature related to behavioral finance and offers a novel approach for integrating findings from that domain into a cognitive investment DSS.

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