Mitigating the Mental Accounting Cognitive Bias through Instruction

Iranian Journal of Accounting, Auditing and Finance

مقاله 5، دوره 8، شماره 1 - شماره پیاپی 26، فروردین 2024، صفحه 89-109   

نوع مقاله: Original Article

شناسه دیجیتال (DOI): 10.22067/ijaaf.2024.43891.1319

نویسندگان

Mona Parsaei^{* 1}؛ Mahnaz Molanazari²؛ Bita Mashayekhi³؛ Farzane Jalalialiabadi⁴

¹Assistant Professor, Department of Accounting, Faculty of social sciences and economics, Alzahra University, Tehran, Iran

²Associate Professor, Department of Accounting, Faculty of social sciences and economics, Alzahra University, Tehran, Iran

³Associate Professor, Department of Accounting, Faculty of Management, University of Tehran, Tehran, Iran

⁴Assistant Professor, Department of Accounting and Data Analytics, La Trobe Business School, Latrobe University, Bundoora, Victoria, Australia

چکیده

This study explores the influence of instructional interventions in mitigating mental accounting bias during capital investment decisions. Initially, we investigate the potential costly errors resulting from mental accounting. Subsequently, we employ instructional strategies to reduce this cognitive bias. Employing an experimental methodology, we employ an 8x2 mixed factorial design to examine the impact of financing sources on mental accounting and the effectiveness of instructional interventions. The findings reveal that managers prone to mental accounting tend to retain debt-financed assets over equity-financed assets. Importantly, instruction proves effective in alleviating this cognitive bias. This research holds significance for both academic scholars and practitioners. It sheds light on the deficiency of instructional resources in accounting education for fostering essential professional judgment skills among students. It is recommended that Finance, Business, and Accounting faculties incorporate modules on mental accounting and related cognitive biases in postgraduate programs. Furthermore, manufacturing industries can benefit from employee training programs to reduce cognitive biases associated with mental accounting in capital budgeting.

کلیدواژه‌ها

Cognitive Bias؛ Instruction؛ Mental Accounting؛ Investment Decision Behavior؛ Judgment and Decision Making

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