Reproducible Reserach Project

This is the repository for the RR course project. In this project we aimed to recalculate the results of the paper Cognitive Biases on the Iran Stock Exchange: Unsupervised Learning Approach to Examining Feature Bundles in Investors’ Portfolios which has been done by Adele Ossareh, Mohammad Saeed Pourjafar and Dr. Tomasz Kopczewski and published in journal of applied science in November 2021.

The paper

The paper innovatively analyses the joint occurrence of cognitive biases in groups of stock exchange investors in Tehran Stock Exchange (TSE). It considers jointly a number of common fallacies, which have hitherto been studied separately. The paper aims to highlight the diverse range of investor’s profiles which are characterised by such fallacies, and the considerable differences observed based on their age, gender, stock market experience and perception of market trends. The biases are as follow:

• Confirmation bias
• Loss aversion
• Gambler’s fallacy
• Availability cascade
• Hot-hand fallacy
• Bandwagon effect
• Dunning–Kruger effect

The aim of RR project

In this project we are trying to gather new observations based on new surveyed data to do the comparison between the results of the original paper and the result of the newly gathered data. The justification is that Iran’s economy has been through a major changes ever since we published the paper and we want to examine the change from the point of investors. For this purpose of chnage in investors’ view on TSE, one of the measure we use to distinguish the previous state of Iran’s economy from today’s situation (June 2022), is CPI which can be calculated as:

$$ \begin{aligned} CPI=\frac{C_t}{C_0}*100 \end{aligned} $$

in which the CPI is consumer price index in current period, C_t is cost of market basket in current period and C₀ is cost of market basket in base period. This increase in CPI has also been reflected in Iran’s central bank report:

Data

The data for the paper can be found here. The newly gathered data from the recent survey can be found in this folder. 32 investors participated in the survey through Google Forms during May 2022 in which they were the stock market holders in TSE (Tehran Stock Exchange)

Folder structure

.
├── fig                           # Folder for images and figures
│   ├── Iran_CPI.png              # Iran's CPI graph
│   ├── NY_Yahoo.png              # New York Times and Yahoo on TSE
│   ├── tree.png                  # Tree structure
└──
├── in                            # Input folder for survey's data
│   ├── survey_data.csv           # Surveyed data from the investors in May 2022
└──
├── src                           # Source files
│   ├── comparative_analysis.R    # R file for analysis
│   ├── func.R                    # Functions
│   ├── presentation.RMD          # RMarkdown for presentation
└──
├── out                           # Presentation
│   ├── presentation.HTML         # HTML for presentation
│   ├── xaringan-themer.css       # CSS for theme presentation   
│   ├── presentation_files        # Additional CSS settings
└──
├── LICENSE
└── README.md