Analyzing behavioral models in explaining reverse engineering in accounting and marketing

Document Type : Original Article

Authors

• Abbasali Haghparast ¹
• Zahra Rashaki ²
• Rajabali Nasiri ²

¹ Assistant Professor, Accounting Department, Zahedan Branch, Islamic Azad University, Zahedan, Iran.

² PhD Student, Department of Accounting, Zahedan Branch, Islamic Azad University, Zahedan, Iran.

Abstract

Whenever the market is relatively inefficient, it is necessary to use effective investment behavioral patterns and models to increase capital. Research conducted in the field of financial behavioral models in many global markets and stock exchanges so far shows that price trends are predictable in the future and that returns are improved through specific trading models. The two main strategies used in financial markets include momentum and reverse investment strategies. Given the importance and efficiency of these two models, in this study we decided to use a descriptive-analytical method by referring to library resources to examine and analyze behavioral models in explaining reverse engineering in accounting and answer the question of which of the models is more efficient? After examining the results, it was shown that five behavioral models in explaining reverse engineering in accounting include: irrational and abnormal portfolio strategies, conservatism bias, self-attribution bias, yield decomposition, and microstructure biases. The effect of the abnormal portfolio behavioral model can be considered more than other models. Abnormal strategies in engineering states that examining daily stock market prices can represent the actual return of these securities. If we subtract the actual return from the predicted, the result obtained is called "abnormal return".

Keywords

• Reverse engineering
• behavioral model
• accounting
• stock market

Main Subjects

• Economic and financial markets

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