Abstract
Abstract Taiwan recently opened up financial restrictions, resulting in an expansion of the financial market. Furthermore, as financial engineering provides more and more financial products, investors may not be satisfied by the traditional products, such as the certificate of deposit and stocks. Investors may become interested in innovative financial products, such as futures, options and derivatives. Nevertheless, it is still an open argument as to how investors decide the amount of first investment for innovative financial product? When they encounter dissonance condition, how do investors adjust the amount of investment? How do investors decide the amount of next investment, especially when the profit is zero for the last investment? Prospect theory presents a critique of expected utility theory and indicates that investors are not full-rational when making decisions under risk. Following the same line of research, this study examines investor’s investment-decision pattern that contains three investment models. These models are the first investment model, the adjustment investment model and the next investment model. Five important factors have been demonstrated that have significant interactive effect to influence the investment-decision pattern. These factors are time pressure, expertise, risk preference, endowment and dissonance condition. In order to simulate the sense of reality, we arbitrarily introduce exchange options as investing targets for investors. The findings can be generalized to any other financial products with similar characteristics as the exchange options particularly designed in this study. Besides, the skills of web questionnaire design are utilized to manipulate time pressure, dissonance condition and avoid subjects coming back prior pages to alter decisions. These characters are different from paper questionnaire. For business contributions, time pressure has been demonstrated that significantly influences investors to make decision under risk. Hence, the verified hypotheses can be utilized by financial institutes for marketing. For academic contributions, five ways interactive effect has been demonstrated that significantly influences the decision of the amount of next investment. These interactive factors are time pressure, expertise, risk preference, endowment and dissonance condition. Keywords: Investment-decision pattern; Time pressure; Expertise; Risk preference; Endowment; Dissonance condition; Exchange options