6. Personality Traits

  1. H. Kent Baker and
  2. Victor Ricciardi
  1. Lucia Fung1 and
  2. Robert B. Durand2

Published Online: 1 MAR 2014

DOI: 10.1002/9781118813454.ch6

Investor Behavior: The Psychology of Financial Planning and Investing

Investor Behavior: The Psychology of Financial Planning and Investing

How to Cite

Fung, L. and Durand, R. B. (2014) Personality Traits, in Investor Behavior: The Psychology of Financial Planning and Investing (eds H. K. Baker and V. Ricciardi), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118813454.ch6

Author Information

  1. 1

    Lecturer in Management, Department of Management, Hong Kong Baptist University

  2. 2

    Professor of Finance, School of Economics and Finance, Curtin University

Publication History

  1. Published Online: 1 MAR 2014
  2. Published Print: 31 JAN 2014

ISBN Information

Print ISBN: 9781118492987

Online ISBN: 9781118813454

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Keywords:

  • personality traits;
  • Five-Factor Model of personality;
  • gender;
  • overconfidence;
  • biological basis of personality traits;
  • risk-taking behavior

Summary

Personality captures a person's essence. Understanding one's personality helps explain and predict the decisions an individual makes and what a person will do. This chapter focuses on the predominant structural model of personality—the Five-Factor Model—which encapsulates personality using five higher-order traits: Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Openness to Experience/Intellect. The Five-Factor Model is rooted in biology and is genetically based. Personality traits are a major aspect of risk taking and overconfidence behaviors. Understanding personality can improve decision making if it helps to regulate and override dispositional tendencies leading to suboptimal outcomes.