CONSERVATIVE BIAS AND ENDOWMENT EFFECT IN INVESTMENT DECISION-MAKING PROCESS: DEVELOPMENT AND VALIDATION OF SCALE

Objective: This work aims to investigate two biases - conservatism and endowment effect - to then build an instrument capable of measuring them. Theoretical Framework: The advancement of studies in behavioral finance has led to the conclusion that individuals evaluate their gains and losses based on individual references. Thus, the perception from which they make decisions is individual and, therefore, subjective. Method: Based on a literature review, the main characteristics of both biases were collected and then a questionnaire was applied to a sample of 150 managers. The data collected from the answers to the questionnaire were subjected to exploratory factor analysis and Cronbach reliability test. Results and Discussion: The findings of this research highlighted three components to the conservatism bias. These components are: Conservatism in investment decisions, Conservatism and security, Conservatism in financing decisions. For the endowment effect, a component was identified and named with the same name as the effect. Research Implications: The indicators of the factor Conservatism in Investment Decisions show that managers are attached to information and past situations, so that they feel uncomfortable in the face of new scenarios. The indicators Conservatism and security and Conservatism in financing decisions indicated the preference for safer investments. The endowment effect indicators were lower, however, they were still able to highlight the indirect influence on the managers in the sample. This problem may arise from the nature of the assets managed by managers, in which established ownership is not perceived. Originality/Value: This study contributes to the literature by develop an instrument capable of identifying and measuring the conservatism and endowment effect biases of managers to pave the way for a discussion about the topic.


INTRODUCTION
The formalization of studies in behavioral finance consolidated the notion that financial decision-making is influenced by aspects related to human behavior and its psyche.In 1970, in a work entitled "The End of Behavioral Finance," Thaler pointed out two problems with the rationality assumption of traditional economic theory.According to the author, in the first place, although in general decisions made by managers are always rational, investigating the individual aspects of decision-makers would constitute an interesting issue worthy of study.In addition, the author also stated that the traditional theory and all its assumptions, foundations, and models have never been fully explained.This creates a possibility of enriching financial studies as the human element and all its aspects (cognitive, psychological, social, behavioral implications etc.) are included in the discussion.
For Thaler (1970), furthermore, the behavioral aspects are so intrinsic to the decisionmaking process that decades before the technology stock bubble burst, stimulating research and consultancy in this regard (Pompian, 2008), the author had already pointed out the existing redundancy in the term "behavioral finance."For him, there was no other way of looking at the subject, and the author aspired to incorporate a greater volume of the behavioral aspect into economic studies, which has occurred to a greater extent in recent years, as shown by Moreira et al. (2019) The development of the behavioral theory of finance began to include the subjectivity of the economic agent in investigations on aspects of the decision-making process.For Marinho (2011), behavioral finance perfected the traditional model, merging concepts of psychology and sociology to those that already existed in order to better explain the reality of decisions made in the market, as individuals systematically violated the Bayesian model based on heuristics and cognitive biases (Slovic et al., 1977).
Heuristics are mental shortcuts developed by individuals to facilitate decision-making.
The result of these shortcuts are the so-called cognitive biases, which can be understood as 4 systematic deviations from rationality (Caviola et al., 2014).These deviations tend to error in decision making.This work aims to investigate two of them, namely the conservatism bias and the endowment effect bias.The objective is to build and validate an instrument capable of identifying and measuring these biases through exploratory factor analysis.The result was a reliable instrument for measuring conservatism and the endowment effect.This research, therefore, is qualitative with a theoretical and empirical approach and contributes to financial studies as it provides an instrument for measuring two behavioral biases.

LITERATURE REVIEW
Since the study of Kahneman and Tversky (1979), which criticized the adequacy of the expected utility theory, behavioral finance has become a fertile field of studies aiming to investigate anomalies influenced by subjective aspects related to individuals and identified in the decision-making process that were not considered by the traditional theory (Ávila et al., 2016;Bao & Gong, 2016).The growing interest of academia in behavioral finance and the advance of studies in this area have led to the conclusion that managers perceive and deal with the same situations in different ways and that there is a presence of subjectivity in the management process (Paul & Sundaram, 2023;Bao & Gong, 2016;Macedo Jr. et al., 2007).
The principles of psychology and sociology incorporated into financial studies questioned several propositions of traditional economic theory and presented a new way of understanding the decision-making process based on a theory that takes into account cognitive and behavioral factors of decision-makers, demystifying the previously considered perfect rationality (Leite et al., 2015).
Traditional finance theory presupposes a formality of the decision-making process.This formality has objective values, explicit risks and is carried out by a perfectly rational agent with perfect access to information inside a duly efficient market scenario.However, according to (Lima et al., 2016), such ideal conditions, especially in the managerial context, do not correspond to reality.For Thaler (1970), this version is extreme and unrealistic.For Hirshleifer (2001), data provided by the environment cannot be optimally analyzed due to limitations of individuals' time and cognitive resources.The behavioral finance literature emphatically concludes that the context of the decision-making process is uncertain, complex, and unstable (Macedo Jr. et al., 2007), which makes the traditional theory inaccurate and full of gaps.
In this context of questioning, the idea that every decision is made based on an intuitive and subjective judgment inevitably developed by individuals and that implies their thoughts 5 and actions enters the discussion.This subjectivity may result in deviations from rationality in financial decisions.When such deviations occur systematically, cognitive biases studied by behavioral finance appear (Macedo Jr. et al., 2007;Nobre et al., 2022).
Behavioral biases are generated by heuristics, which refer to mental shortcuts created in the individual's cognition to simplify the process of judgment and of the most diverse types decision-making (Hirshleifer, 2001).According to Marinho (2011), the heuristic process is inseparable from the human essence and is based on the individual's intuition, often presenting ambiguity and lacking the consideration of all necessary premises for the formulation of a new understanding.As a result, decision-making is mischaracterized as a strictly rational process.
The heuristic process develops from trials and errors through which individuals make discoveries and develop principles to decide more quickly when faced with new situations (Marino, 2011;(Hirshleifer, 2001) .However, despite seeming to facilitate the decision-making process, the generation of preconceived ideas that will soon be taken into account in other circumstances involved in the decision-making process may lead the individual to wrong conclusions and, consequently, wrong decisions.As per Hirshleifer (2001), heuristics are effective as long as they are applied to appropriate problems.However, the biases that result from them may be problematic if used beyond the appropriate domain of applicability.
In the managerial context, in which the decisions to be taken concern not only one's own assets but also the property of third parties, heuristics and the systematic errors that can be thus caused turn on an alert that stimulates a search for understanding the subject and increases the interest in the study of behavioral finance (Ávila et al., 2016;Bao & Gong, 2016).
There are three types of heuristics so far understood by behavioral finance: i) availability heuristic, which assigns greater importance to what is most remembered to the detriment of what is less present in memory, delimiting decisions to what is understood by the most frequent information in memory; ii) representativeness heuristic, which classifies and make decisions about things based on characteristics judged to be similar (Barberis et al., 1998) ; and iii) anchoring and adjustment heuristic, which leads to adherence to an idea previously produced and about which there is difficulty in adjusting through the emergence of new information (Lima et al., 2016).
The systematic deviations generated by heuristics that cause errors in the decisionmaking process, in a contradictory way to what economic theory proposed, are called cognitive or psychological biases, or even behavioral biases (Moreira et al., 2019).Caviola et al. (2014) summarizes the concept of bias as an error made by the human psyche when deviating from rationality.They are related to beliefs, values, perceptions, and ultimately the individual's past 6 experiences in a way that they directly affect the way the individual make decisions (Silva & Noble, 2021).
In the literature, biases have been approached as judgment and perception rules that people use to make decisions in complex and uncertain scenarios (Moreira et al., 2019).Studies also point to a relationship between behavioral biases and individuals' cognitive ability, in addition to a connection with market dynamics and socioeconomic characteristics of decisionmakers (Maymin & Langer, 2021;Hirshleifer, 2001;Bao & Gong, 2016).Still according to Caviola et al. (2014), biases affect our decisions on a moral and ethical level.In the organizational context, they have influence on management in general, from project design to team culture, and on decisions about the use of financial resources (Nobre, 2018).
Among the various biases studied by behavioral finance literature, the conservatism bias has often been related to the anchoring and adjustment heuristic and points to an adherence to past information that may influence a decision-maker to make mistakes by refusing to give in to changes.Another bias cited by authors, and which is related to the availability heuristic -as it overestimates decision-making capacity, leading to the neglect of information that is not easily remembered -, is the endowment effect bias (Kimura, 2003;Noble, 2018).Both are the object of study of this work.
Since it is well established that cognitive biases define changes in the market based on the biased decisions of its agents (Marinho, 2011), this work aims to build and validate an instrument capable of identifying the biases of conservatism and endowment effect.

CONSERVATISM BIAS
The definition of this bias is a mental process in which information from the past is more relevant to the individual than information from the present for a given decision-making process, so that the absorption of new information happens slowly.The reason for this is anchoring in information from the past (Barberis et al., 1998;Shleifer, 2005;Barberis, N., Shleifer, Vishny, 1998;Edwards, 1968;Ritter, 2003;Shiller, 2005).
However, as Hirshleifer (2001) observed, resistance to changes occurs by the presence of abstract information, which leads to the understanding that the individual who presents a conservatism bias needs concrete information to be more susceptible to changing scenarios.In addition, the findings of (Slovic et al., 1977) point out that experienced managers tend to make more conservative decisions because of past experiences that were successful, and that abrupt changes create resistance in and slow reaction of managers, systematically violating the 7 principles of rational or Bayesian decision-making.Thus, it is likely that the effects of conservatism bias are smaller in the presence of solid information that points to factually good results.
The main cause of conservatism bias, as Edwards (1968) pointed out, is the lack of precision in data aggregation.For the author, the individual's lack of ability to combine information with their respective meanings to reach diagnoses and revise opinions leads to slow reaction and adherence to information from the past, indicating a deviation from rationality.
Thus, the decision maker is not a Bayesian one (Slovic et al., 1977).
To support the authors of the previous paragraph, Winkler and Murphy (1973), criticizing in their work the experiments that generalize the results to the real world, state that the factual world contains information that tends to be unreliable and that, as a result, individuals also begin to devalue information generated by experiments and stick to past information, leading to conservatism bias.The work of Nobre ( 2018) also revealed that, among managers studied, conservatism was more evident in those less rooted than in those with a higher level of managerial roots, and that this bias is also related to low risk tolerance.This finding may point to another cause for the manifestation of bias, namely care in deciding on financial resources for fear of implications to career, compensation etc.

ENDOWMENT EFFECT BIAS
This behavioral tendency can be described as the mistaken perception of value that an individual attributes to a good, so that there is difficulty in detachment (Knutson et al., 2008).
In a scenario with the conditions proposed by economic theory, it is expected that the minimum individuals are willing to receive for a good corresponds to the maximum that they are willing to pay.However, individuals who manifest an endowment effect as a bias tend to attribute a higher value to the good based on their own references and expectations that are not aligned with those of the market (Bao & Gong, 2016;Marinho, 2011).Kahneman et al. (1991) suggested that the main characteristic of the endowment effect is not exactly the overestimation of the value of a good, but the pain of giving it up.(Knutson et al., 2008), in his work investigating the neural antecedents of bias, pointed out that establishing ownership increases the relevance of a loss.Bao & Gong (2016), in turn, stated that the endowment effect is based on aversion to loss.Thus, it is possible to see that this bias tends to manifest itself as a property is established that makes it difficult for the individual to dispose of the good, probably motivated by an aversion to loss (Marinho, 2011).however, noticed that the endowment effect bias is among the biases indicating that managers overestimate their decision-making skills, which seems to point to a relationship between this bias and the availability heuristic.Since individuals overestimate their ability to decide and attribute value to a good, even if it does not correspond to the real value, the neglect of important information for decisions and the determination of the choice using the most frequent information in memory tends to be the common scenario.
Due to the level of influence that cognitive biases, specifically conservatism and the endowment effect, have on decision-making, this work aims to build and validate an instrument capable of identifying them based on the characteristics collected in the literature (summarized in Table 1) and according to the methodology described in the next section.

MATERIALS AND METHODS
In order to create an instrument capable of measuring the biases of conservatism and endowment effect proposed in this work, a field survey was carried out in which a structured questionnaire was applied to company managers directly involved in decision-making processes.For the collection of primary data, 150 managers, business executives, and partners from different segments and business sizes participated in this research.It is worth mentioning that the collected data were obtained according to the availability of respondents and that they did the minimum of five observations for each variable (Hill & Hill, 2006).
The statements constructed to characterize the conservatism bias aimed to identify the relevance of past information to the detriment of the emergence of new information and the

ED1
I owe R$ 5,000 to a bank and have R$ 5,000 in savings for my son's college I know I can pay off that debt in a while, so I'd rather not use my son's savings ED2 When deciding to dispose of an investment, I chose the value for the sale price based on the value that the asset represented to me ED3 I believe that the recommendations of a large consultancy company about an investment that the company wants to make are more reliable than those of a small consultancy company ED4 If I bought a share for R$ 10, I do not agree to sell it for less than R$ 10 ED5 I purchased a machine for my company; when I needed to sell it, I did not accept the lowest value offers in relation to the initial purchase price ED6 When valuing an asset of my own, I assign a value to what the asset represents to me rather than the value it has in the market Source: prepared by the authors The questionnaire, in the Likert scale format, whose function is to measure factors through the level with which the respondent agrees with the proposed statements, was submitted to a content validation process with a group of specialists.Then, the instrument was applied and the data were collected and treated by exploratory factor analysis (EFA) and tested using Cronbach's Alpha. 10

PRESENTATION AND ANALYSIS OF RESULTS
The sample profile shows that 57% of the managers participating in the survey are male and 43% are female.Regarding academic training, most respondents (45%) have complete higher education.As for the market sector in which the sample managers work, commerce had the highest share of respondents (40%).The average age of respondents was 46 years, and the time working in the company verified was, on average, 24 years.Also, the average working time of respondents corresponded to 16 years.

RELIABILITY AND VALIDITY OF MEASUREMENT MODELS
The variables used in the questionnaires sought to understand the influence of conservatism and endowment effect biases in the decision-making process in real assets.The "Conservatism" factor is made up of nine different variables and the "Endowed Effect" factor is made up of six equally different variables.The results of the exploratory factor analysis and the reliability test of both factors are presented below.
The Kaiser-Meyer-Olkin (KMO) evaluation methods and Bartlett's Sphericity test were used to analyze the application of factor analysis as valid for the chosen variables and for the sample size collected.After that, the data shown in Table 4 were obtained.From the data shown in Table 4, the suitability for the application of the EFA technique was observed.The sample size was classified as good and adequate, with a KMO of 0.777.Bartlett's sphericity test, with a χ 2 of 364.136, presented a significance level of 0.000, which indicates a favorable matrix for carrying out the factor analysis, as there is a relationship between the variables indicated in the research.
By observing the values obtained in the anti-image matrix, the sample was adjusted to proceed with the analysis since the values obtained in the diagonal of the matrix were: the lowest equal to 0.646 and the highest value equal to 0.852.These values are within the Therefore, the exploratory factorial analysis was carried out with the nine items of the conservatism factor indicated both by the KMO test and by the anti-image correlation matrix as adequate.In all, three components with eigenvalues equal to or greater than 1 were observed, which together add up to 64.52% of the total variance of the components.Item 1 concentrated 38.58%, followed by item 2 with 13.66% and by item 3 with 12.28% of the variance.Table 2 shows the generation of the nine components and their respective eigenvalues.Once the data were measured, the three components of the analysis of variance with an eigenvalue greater than 1 were extracted using the Varimax rotation, thus generating three factors.Table 6 shows the composition of these components in detail.

Table 6
Factor loadings of components As item CO7 presented approximate factor loadings of 0.522 and 0.526 for components 1 and 2, respectively, this item was excluded from the components and a new exploratory factor analysis was performed without it.
A new KMO value of 0.739 was obtained, which once again indicates that the sample size is good, and the Bartlett test was χ 2 294.663, with a significance of 0.000.The analysis proceeded with the observation of values obtained in the anti-image matrix, which presented the value of 0.832 as the highest measurement of sample adequacy and the value of 0.635 as the lowest measurement, both within the indicated parameters.The exploratory factor analysis was continued with eight items, and components with indicators of eigenvalues greater than or equal to 1 were generated again, as Table 4 shows.Components 1, 2 and 3 add together 67.03% of the total variance, with the first component 38.38%, the second 14.98%, and the third 13.67% of the variation.8 shows the composition of these three components extracted in three factors of analysis of variance through the Varimax rotation.

Table 8
Factor loadings of components Component 1, formed by the items Conservatism 1, 4, 5 and 9, was named "Conservatism in investment decisions," as it aims to identify whether the conservatism bias influences managers when they need to make decisions related to investments in the market in which they operate, whether acting cautiously while waiting for market responses or considering past situations.The Cronbach's Alpha of the component presented a value equal to 0.695, which, according to the literature, indicates an internal consistency of the construct since, for the construct to be reliable, it is necessary to present an indicator greater than 0.6.Thus, the factor "Conservatism in investment decisions" can be classified as reliable.14 Component 2 was named "Conservatism and security," as it seeks to investigate how the conservatism bias makes managers seek security when making new investments.The component items helped to verify whether managers choose to innovate or to repeat investments already made, and if they decide to make less risky investments even if they do not lead to high returns.The Cronbach's Alpha of this factor is 0.658, which is within the acceptance parameter.
Finally, regarding Cronbach's Alpha, the component 3, named "Conservatism in financing decisions," seeks to examine whether managers are biased when financing their investments since conservative managers tend to choose to use their own capital instead of third-party capital, presented a Cronbach's alpha equal to 0.780.Thus, this factor is also reliable.
Moving on to a correlation analysis between the items of the conservatism components, Table 9 shows the existing correlation between the items of "Conservatism in investment decisions."The main diagonal is formed by the mean and the standard deviation corresponding to each item; the other cells, however, contain the correlations between the factor indicators.
The correlation matrix does not show multicollinearity or singularity.That is, the examination of the matrix does not reveal variables with coefficients greater than 0.9, indicating that there is no overlapping of information from the indicators that form the factor.Therefore, all correlations were positive and significant, with values between 0.281 and 0.478.9 also shows that all items that make up factor 1 have a standard deviation lower than the mean of their respective item, meaning that there is little dispersion of items and reinforcing the consistency of the instrument.It is also worth mentioning that there is a strong correlation (0.478) between the items Conservatism 4 and Conservatism 5, which may indicate that the managers in the sample tend to consider past situations when making new managerial investment decisions, comparing present situations with those that occurred when investments showed acceptable returns.The items Conservatism 4 and 9 present a correlation of 0.413, which may indicate that managers, in addition to returning to past situations, also cautiously assess market behavior, waiting diligently to make new investments.
Table 10 shows the correlation between the items of the "Conservatism and security" component.The main diagonal is formed by the mean and the standard deviation corresponding to each item and the other cells, however, contain the correlations between the factor indicators.
The correlations matrix does not present multicollinearity or singularity, that is, the examination of the matrix does not reveal variables with coefficients greater than 0.9, indicating that there is no overlapping of information from the indicators that form the factor.Since there is only a correlation matrix of 0.502 between the items Conservatism 6 and 8, there is interference of conservatism bias in the decision-making of managers who opt for security when investing, not innovating in decisions and preferring safer investments.Table 11 shows the items Conservatism 2 and 3, which are included in the factor "Conservatism in financing decisions," and reveals the only existing correlation between the items of the component.The main diagonal is formed by the mean and the standard deviation corresponding to each item and the other cells, however, contain the correlations between the factor indicators.The correlations matrix does not present multicollinearity or singularity, that is, the examination of the matrix does not reveal variables with coefficients greater than 0.9, indicating that there is no overlapping of information from the indicators that form the factor.
Since there is only a correlation matrix of 0.640 between the items Conservatism 2 and 3, it is understood that, when making a financing decision, managers prefer to use their own capital, not opting for third-party capital.As for the endowment effect, seeking to measure whether the data collected in the questionnaire are adequate for the application of exploratory factor analysis, the same Kaiser-Meyer-Olkin (KMO) evaluation method and Bartlett's Sphericity Test were conducted.Table 12 shows the results.Because it has a KMO value of 0.599, the sample size was considered bad, but acceptable, as it has a value greater than 0.5.If this value were lower than 0.5, the sample would be considered unacceptable for EFA application.Bartlett's sphericity test showed a significance level of 0.000, with a χ 2 of 131.711.
The anti-image matrix of correlations of the variables was then created.The values obtained, according to Table 13, were greater than 0.5 for all variables, except for the endowment effect variable 1, which resulted in 0.471.However, it was decided to proceed with the factorial analysis of all variables.Based on the favorable data from the KMO and the sphericity tests, the exploratory factor analysis was carried out.Table 14 shows the eigenvalues of the explained variance of components, of which 1 and 2 presented values greater than 1, which indicates that the variables are explained by all factors.Although the components concentrated 56.26% of the variance (the component 1 with 35.68% and the component 2 with 20.58%), after processing data through Varimax rotation it was only possible to extract one component.The rotation of data to generate factors was not possible.With a Cronbach's Alpha indicator of 0.621, the correlation construct between endowment effect variables is classified as reliable.
Table 15 shows the levels of internal correlation between the items of the endowment effect factor.The table shows the mean and standard deviation of items on the main diagonal, while the other cells of the table show the correlations between the factor indicators.The correlations matrix does not present multicollinearity or singularity, that is, the examination of the matrix does not reveal variables with coefficients greater than 0.9, indicating that there is no overlapping of information from the indicators that form the factor.The endowment effect bias influences individuals to attribute to a good a value greater than it actually has.The correlations, which range from -0.014 to 0.517, existing between the items, as they are not strong but only above average, may indicate that managers are influenced by the endowment effect on their investment decisions, but, at least under these conditions, not directly or permanently.

ANALYSIS OF FACTORS
From the bias indicators studied here, managers' decisions are, directly or indirectly, at a strong or weaker level.Conservatism and the endowment effect affect them, and the conservatism bias indicators show values greater than those of the endowment effect bias.
The indicators of the factor Conservatism in Investment Decisions, with averages between 6.9933 and 7.1533, and the correlation between them show that managers are attached to information and past situations, so that they feel uncomfortable in the face of new scenarios.19 by managers since, according to the literature, the endowment effect tends to be more present when ownership is established.

DISCUSSION OF FACTORS
The conservatism bias is associated with inflexibility in the face of new information and changes due to attachment to past information and situations.This difficulty or slowness in reacting to new scenarios may affect investment decisions in terms of viability and profitability and in terms of security, in addition to directly affecting financing decisions.Thus, the three components of conservatism aimed to investigate aspects related to the manager's fear of giving in to transformations and recognizing new information to decide and the impacts of this on final choices.The instrument proved to be reliable in identifying the management's caution in the face of financial decisions, always being careful with the comparison with previous situations.
The endowment effect bias addresses the fear of the pain of giving up a good whose perceived value by the individual who owns it is greater than what it corresponds in reality.
This bias may influence decisions as it inhibits the manager from negotiating based on real assumptions and conclusions about the asset.The items of the component of the instrument dedicated to identifying this bias were designed to verify misperceptions of value and attachment to goods.The instrument, despite the inadequacy of the sample, show a satisfactory Cronbach's Alpha, therefore it could also be validated as consistent and reliable.

FINAL CONSIDERATIONS
The purpose of this work was to develop an instrument capable of identifying and measuring the conservatism and endowment effect biases of managers to pave the way for a discussion about the topic.The constructed instrument was exposed to an exploratory factor analysis and Cronbach's reliability test.It is reliable to measure both biases, although it shows superior indicators and greater reliability for measuring conservatism than endowment effect.
For the construction of the instrument, a literature review was carried out.It allowed to gather the main characteristics of conservatism bias and endowment effect.From that, a set of statements was elaborated and presented to a sample of 150 managers who indicated the level of agreement with each statement.The results show an influence of conservatism on the decisions of managers, who prefer safer investments and equity and who are always comparing This research contributes to studies in behavioral finance by providing an instrument to measure two cognitive biases.However, its limitation is the sample size, which compromises the suitability of exploratory factor analysis.

Conservative
Bias and Endowment Effect in Investment Decision-Making Process: Development and Validation of Scale ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.7 | p.1-22 | e08356 | 2024.8 (Pompian, 2008) classified the types of behavioral investors and categorized the endowment effect as one of the biases related to low risk tolerance.Managers who manifest this bias emphasize financial security and preservation of perceived wealth.Nobre (2018), Conservative Bias and Endowment Effect in Investment Decision-Making Process: Development and Validation of Scale ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.7 | p.1-22 | e08356 | 2024.9 resistance to changes or slow reactions due to new information.
in decision-making based on the detection of a mistaken perception of the value of the good.A greater value than what the good is really worth and the attachment relationship with the good are attributed as the decision maker recognizes the established property.

Conservative
Bias and Endowment Effect in Investment Decision-Making Process: Development and Validation of Scale ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.7 | p.1-22 | e08356 | 2024.11 recommended parameters, in which values above 0.5 indicate adequacy of statements to the formation of factors.Thus, all values obtained indicated compliance to proceed with the factorial analysis.
Therefore, investment decisions are subject to this bias.Managers prefer to use their own capital instead of seeking financing with third parties.The indicators of the factor that addressed conservatism in financing decisions correlated considerably, as well as indicators of the factor Conservatism and Security, which indicated the preference for safer investments.Conservatism factors proved to be reliable, with Cronbach's Alpha above 0.6.The indicators of the endowment effect, in turn, were lower but still capable of pointing out an indirect influence of the endowment effect on the managers of the sample.The weak indicators and the low correlation between them may be due to the nature of the assets managed Conservative Bias and Endowment Effect in Investment Decision-Making Process: Development and Validation of Scale ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.7 | p.1-22 | e08356 | 2024.

Conservative
Bias and Endowment Effect in Investment Decision-Making Process: Development and Validation of Scale ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.7 | p.1-22 | e08356 | 2024.20presentsituations with past ones to define choices.There is a tendency towards attachment to goods that generates a mistaken perception of their value, leading to endowment effect bias.

Table 1
Characteristics of conservatism and endowment effect collected in the literature Table 2 shows the items constructed to investigate conservatism bias.

Table 2
Statements of conservatism bias

Table 3
lists statements developed with the purpose of identifying the endowment effect

Table 4
KMO Measurement and Bartlett Test

Table 5
Total explained variance

Table 9
Correlation between the indicators, mean and standard deviation of the conservatism factor in

Table 10
Correlation between the indicators, mean and standard deviation of the conservatism factor,

Table 11
Correlation between the indicators, mean and standard deviation of the conservatism factor in

Table 12 KMO
Measurement and Bartlett Test

Table 13
Anti-Image Matrix

Table 14
Total explained variance

Table 15
Conservative Bias and Endowment Effect in Investment Decision-Making Process: Development and Validation of Scale Correlation between the factor indicators, mean and standard deviation of the components of ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.7 | p.1-22 | e08356 | 2024.18