Research on Securities Investment Strategies from the Perspective of Social Psychology

Abstract

The efficient market hypothesis is rooted in the core assumption of investor full rationality, yet it faces considerable challenges in explaining the persistent price anomalies and irrational volatility observed in the A-share market. This study employs a social psychology research framework, utilizing micro-level transaction data from individual investor accounts in the A-share market during 2023 to 2025 as empirical evidence, to examine how individual cognitive biases, group emotional contagion, and social information interference influence investment decisions, while identifying quantifiable patterns of behavioral distortions across different investor tiers. Building upon foundational theories such as cognitive dissonance and group contagion, we develop a three-dimensional collaborative behavior-correction investment framework and validate its effectiveness through group backtesting. The findings demonstrate that psychologically driven irrational limitations are the primary cause of diminished returns for retail investors. Specifically, individual cognitive biases lead to systematic misjudgments in asset valuation, while group emotional contagion amplifies herding behaviors during periods of market stress. Furthermore, social information interference from digital platforms exacerbates informational asymmetries and distorts price discovery mechanisms. Incorporating behavioral thresholds into trading systems significantly reduces losses from irrational trades, providing robust empirical support for optimizing decision-making among capital market participants. This research contributes to the growing literature on behavioral finance by offering a structured, psychology-informed approach to mitigating investment inefficiencies and enhancing market stability.