IMPACT OF PSYCHOLOGICAL SCHEMA ON FINACIAL DECISION MAKING AT ENTREPRENUERS

Abstract

Purpose: The purpose of this research is to understand the psychological aspects of an entrepreneur and their impacts on financial decision making. Entrepreneurs possess cognitive skills that they use in making investment choices. They use their brain for making successful decisions. Effort is made to determine their cognitive ability and to focus on the investor’s psychology as well as its role in financial decision making. Methodology/Sample: The research, being explanatory in nature, involved quantitative data collection through questionnaire. The data was collected through a sample of 160 entrepreneurs of every level, compulsory was that all of them must be doing some business with the authority of making their own decisions. The instrument used was SPSS, and data was analyzed by regression and correlation test. Findings: Through this study, it was investigated that entrepreneurs are rational while making financial decisions. They relate their brain process with their decisions. They are motivated to make the right investment choices. Entrepreneurs are also aware with the fear that can cause damage to their decisions. Investors are more towards rationality then to use emotional aspects in their financial decisions. It is found that emotions have negative impact on financial decision making. Practical Implications: The findings/results of this research are likely to help those who make their financial and business decisions. This research is focused on the rational styles of decisions that are better choices for investors. In taking critical decisions, entrepreneurs use their brain system for the better results. Emotional decision making cannot be a better choice for investors.