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Abstract

This research aims to analyze whether investors trade based on rational expectation or portray the behavior of confidence, optimism, or pessimism before, during, and after the global financial crisis. The field of behavioral finance questions investors' decision-making ability and considers that investors' behavior influences their decisions. This research uses regression analysis to determine whether investors are rational or whether behavior such as confidence, optimism, or pessimism influences their choices before, after, or during the financial crisis. The results suggested that rational expectation and pessimism are rejected during all three phases. Investors are confident and optimistic before and after the financial crisis, and none of the three behaviors impacts investors during the financial crisis. This research contributes to the field of behavioral finance for intelligent decision-making. It will help understand how and why social issues behave the strategic management in a certain way.