Affect-based stock investment decision: The role of affective self-affinity

Usul, Naime
Özdemir, Özlem
Kiessling, Timothy
This paper studies the role of affective self-affinity for a company in the stock investment decision by investigating the factors triggering it. Based on the social identity theory and the affect literature we hypothesize that three types of identifications, namely group related, company-people related and idea ideal related, trigger affective self-affinity for a company which results in extra affect-based motivation to invest in the company's stock. The two ideas included in the idea/ideal related affective self-affinity are socially responsible investing and nationality related ideas. Based on the survey data of 133 active individual investors, we find that the more the investors perceive the company supports/represents a specific group or idea or employ a specific person, with which the investors identify themselves, the higher is the investors' affective self-affinity for the company. This results in higher extra affective motivation to invest in the company's stock over and beyond financial indicators. Thus, investors' identification with groups, people, or ideas such as socially responsible investing and nationality results in higher affect-based investment motivation through affective self-affinity aroused in the investors. Moreover, positive attitude towards the company is another factor that explains the affect-based extra investment motivation.
Journal of Behavioral and Experimental Economics


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Citation Formats
N. Usul, Ö. Özdemir, and T. Kiessling, “Affect-based stock investment decision: The role of affective self-affinity,” Journal of Behavioral and Experimental Economics, pp. 97–109, 2017, Accessed: 00, 2020. [Online]. Available: