Mitigating the Mental Accounting Cognitive Bias through Instruction
Publish Year: 1403
نوع سند: مقاله ژورنالی
زبان: English
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شناسه ملی سند علمی:
JR_IJAAF-8-1_005
تاریخ نمایه سازی: 16 دی 1402
Abstract:
This study explores the influence of instructional interventions in mitigating mental accounting bias during capital investment decisions. Initially, we investigate the potential costly errors resulting from mental accounting. Subsequently, we employ instructional strategies to reduce this cognitive bias. Employing an experimental methodology, we employ an ۸x۲ mixed factorial design to examine the impact of financing sources on mental accounting and the effectiveness of instructional interventions. The findings reveal that managers prone to mental accounting tend to retain debt-financed assets over equity-financed assets. Importantly, instruction proves effective in alleviating this cognitive bias. This research holds significance for both academic scholars and practitioners. It sheds light on the deficiency of instructional resources in accounting education for fostering essential professional judgment skills among students. It is recommended that Finance, Business, and Accounting faculties incorporate modules on mental accounting and related cognitive biases in postgraduate programs. Furthermore, manufacturing industries can benefit from employee training programs to reduce cognitive biases associated with mental accounting in capital budgeting.
Keywords:
Cognitive Bias , Instruction , Mental Accounting , Investment Decision Behavior , Judgment and Decision Making
Authors
Mona Parsaei
Assistant Professor, Department of Accounting, Faculty of social sciences and economics, Alzahra University, Tehran, Iran
Mahnaz Molanazari
Associate Professor, Department of Accounting, Faculty of social sciences and economics, Alzahra University, Tehran, Iran
Bita Mashayekhi
Associate Professor, Department of Accounting, Faculty of Management, University of Tehran, Tehran, Iran
Farzane Jalalialiabadi
Assistant Professor, Department of Accounting and Data Analytics, La Trobe Business School, Latrobe University, Bundoora, Victoria, Australia