Social Sciences in China (Chinese Edition)

No.3, 2013

 

The Ethical Environment of Stock Market and the Ambiguous Decision-making of Investors: A Theoretical and Experimental Study

(Abstract)

 

Wang Qing and Zhou Wei

 

Building on the “cognitive rationality” hypothesis, the theory of financial ethics and the experimental results on behavioral game and “altruistic” preferences, this study proposes the concepts of “ethical preference” and “ethical environment” to investigate, theoretically and experimentally, the effects of the ethical environment on investors’ behavior in the context of “ambiguous” market information. Our study reveals that in the context of ambiguity, the ethical environment of the market can affect the investors’ transaction behavior by way of influencing the ambiguity extent of market information and the investors’ attitude toward ambiguity; that the illegal behavior of the market can affect the stock transaction behavior of both party companies and non-party companies by way of influencing the ethical environment of the market.