engleski

Rational or irrational consumer behaviour: Case of Croatian financial market

According to the traditional hypothesis, the efficient financial markets are result of rational human behaviours based on all available information useful in the maximization of expected utilities and returns for any particular members. The developed system of rational behaviours is the base for everyday business decisions of financial institutions’ agents as well as depositors, investors and borrowers as typical consumers on financial market. This paper examines different phenomenon and anomalies in financial market that reflect some changes in the behavioural assumptions underlying the traditional economic model. That includes the analysis of observed cases for irrational and illogical behaviour of consumers on financial market. In the case of Croatian financial market the paper tries to explain some anomalies in the forms of irrational and illogical people’ s decisions when they spend, invest, save, and borrow money. The most of them reflect the specific conditions in Croatia as economy with small credibility of monetary policy, the high level of currency substitutions, and the poor structure of financial instruments on the market. The analysis in the paper is based on principles of behavioural finance as combination of psychology, sociology and economics in explanations of rational and irrational people’ s decisions.

consumer behaviour; financial markets; Croatia

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