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A study of stress as a predictor of irrational decision making for workers in the financial services sector

Connolly, Martin (2017) A study of stress as a predictor of irrational decision making for workers in the financial services sector. Masters thesis, Dublin, National College of Ireland.

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Abstract

The purpose of this paper is to investigate the relationship between stress and decision making in the financial services industry. To this end, this paper examines whether individuals who record a high score on the Perceived Stress Scale are more prone to irrational decision making. According to rational choice theory, the preference between options should not change or reverse due to changes in how the option is framed.

This paper adopts a cross-sectional research design and takes a quantitative approach, with a questionnaire administered to 264 people, of which 168 are employed in financial services, with the latter group forming the sample population. A snowball and convenience approach was taken to distribute the survey. Data analysis is performed, with hypotheses supported that a higher stressed group are more likely to make irrational decisions on framing effect experiments replicated from studies by Tversky and Kahneman (1981) and Rubinstein (2003).

The results show that higher stress levels can be a predictor of irrational decision making. A logistic regression model is built to test the data, but does not account for a high degree of variance. As the findings point towards a positive relationship between stress and cognitive bias in decision making, this paper adds to existing research on how employee performance and decision-making capabilities are being impacted by stress, and supports the validity of the existing framing experiments.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HG Finance > Financial Services
H Social Sciences > HF Commerce > Industrial Psychology > Workplace Stress
Divisions: School of Business > Master of Business Administration
Depositing User: CAOIMHE NI MHAICIN
Date Deposited: 15 Nov 2017 11:30
Last Modified: 15 Nov 2017 11:30
URI: http://trap.ncirl.ie/id/eprint/2841

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