The Alienation of Behavioral Biases Among A-Share Investors from a Localization Perspective

Main Article Content

Zekai Jiang
School of Management Science and Engineering, Central University of Finance and Economics, Beijing 100000, China

DOI: https://doi.org/10.70267/fer.250302.277283

Keywords

localization, A-share market, investor behavioral biases, behavioral alienation, behavioral finance

Abstract

Behavioral finance has established a complete theoretical system in mature Western capital markets, effectively explaining the alienation induced by Market Behavioral Biases. However, the A-share as an emerging policy-driven and retail-driven market, has a unique investor structure, trading mechanism, and indigenous sociopsychological characteristics, leading to a significant alienation of classic behavioral bias theory. This article will take the Alienation of Behavioral Biases Among A-Share Investors as the core object of study. And based on Prospect Theory and employing a literature review approach, this article will conduct a systematic analysis of such aberrant phenomena as the polarization and reversal of the Disposition Effect, the full-chain extension of the Herd Effect, and the cyclical reversal of overconfidence, also delve deeply into the roots of distortion—including trading systems, information asymmetry, the retailization of institutional investors, and local culture. Research indicates that Western behavioral finance theory is not fully adapted to the unique institutional and cultural environment of the A-share market, unable to explain its underlying causes. Promoting the localization of behavioral finance theory is a critical path for correcting A-share investor behavioral alienation and enhancing market pricing efficiency, providing a theoretical basis for regulatory policy formulation and investor strategy construction. This paper addresses the gap in traditional research that overlooks institutional and cultural differences in emerging markets, while acknowledging limitations such as the lack of empirical testing. Future research could further refine the localized behavioral finance theoretical system through empirical and quantitative studies.

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Published
May 29, 2026
Issue
Vol. 3 No. 2 (2026)
Section
Research Articles
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How to Cite

Jiang, Z. (2026). The Alienation of Behavioral Biases Among A-Share Investors from a Localization Perspective. Financial Economics Research, 3(2), 277-283. https://doi.org/10.70267/fer.250302.277283