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IJOES
36,1
12
Received 12 April 2019
Revised 12 April 2019
Accepted 9 June 2019
International Journal of Ethics and
Systems
Vol. 36 No. 1, 2020
pp. 12-41
© Emerald Publishing Limited
2514-9369
DOI 10.1108/IJOES-03-2019-0053
Analyzing causal relationships of
effective factors on the decision
making of individual investors
to purchase shares
Hossein Sayyadi Tooranloo
Department of Management, Vali-e-Asr University of Rafsanjan, Rafsanjan,
Islamic Republic of Iran
Pedram Azizi
Department of Accounting, Shiraz University, Shiraz, Islamic Republic of Iran, and
Ali Sayyahpoor
Department of Management, Farabi College of Tehran University, Ghom,
Islamic Republic of Iran
Abstract
Purpose – Changes in economic markets have made it necessary to understand the psychology of
individual investors. Conducting effective studies on the decision of investors to buy stock in the stock
market can be useful. Therefore, it is necessary to identify and prioritize the factors affecting the decision-
making of investors to purchase shares of the stock exchange. The purpose of this study was to analyze
causal relationships and to weight effective factors on individual investment to purchase shares of Tehran
Stock Exchange.
Design/methodology/approach – The present study is applied research in the term of its purposes and
a descriptive-survey one in the term of data gathering methods. The data required in this study was collected
through library and field studies. The study population included 35 investment experts. In present study,
multi-criteria decision-making techniques in type-2 fuzzy environments have been used to analyze the causal
relationships and weighing the factors affecting individual investment in purchasing stock in the stock
market.
Findings – In the study, 4 indicators and 20 sub-indicators influencing individual investors’ decision to
purchase shares of Tehran Stock Exchange were selected based on the literature review in the field of
investment in the stock exchange, as well as interviews with experts. Analyzing the opinions of experts
showed that they have much paid attention to financial index compare to the economic, political and
psychological indicators of the market in determining the priority of indicators. In analyzing sub-indicators, it
was identified that Iranian investors pay special attention to economic and political developments, political
news and international economic developments.
Research limitations/implications – The present study has been carried out in Iran, and therefore, is
geographically limited to Iran. In thematic terms, it is limited to effective factors of individual investments in
Tehran Stock Exchange. The statistical population of present study was limited to investing experts in
Tehran Stock Exchange. The difference in financial, economic, social and political conditions of individuals
was another limitation of present study. The main consequences of research were the explanation of causes of
investors’ higher attention to financial factors than economic, political and mental factors of market in buying
stocks.
Originality/value – Given the uncertainty in the market status, using multi-criteria decision-making
techniques in financial analysis can help decision-makers to make better decisions. In addition, it would be
possible to take into account many variables that do not have a mathematical aspect but are important in
decision-making and lead to increased decision-making satisfaction. The research initially analyzed causal
relationships of determinants of individual investment on stock exchange for buying stocks through a type-2 Analyzing
fuzzy approach.
causal
Keywords Investments, Tehran Stock Exchange, Fuzzy, Individual investors, Group decision approach
relationships
Paper type Research paper

1. Introduction
The increasing development and diversification of economic activities has led to
13
development of the capital market and expansion of the scope of the activities in joint-stock
companies (Mohamed Saat et al., 2012; Chong and Lai, 2011; Hodge, 2003). In stock
companies as the largest and most important economic units of the country, buying and
selling of securities is carried out under certain rules and regulations (Sultana and
Pardhasaradhi, 2012; Chong and Lai, 2011). In this, buying and selling, major and individual
investors need information with specific content (Morck et al., 2000). Meeting the needs
requires to providing reliable and comparable financial and non-financial information by
companies through using professional accounting services in the units and services of
independent professional accountants and investigation of information and audit of
financial statements (Kane, 2004).
The financial and non-financial information required by investors involves a wide range
of factors, including economic and social effects (Luminita, 2014; Bhimani and Langfield-
Smith, 2007). On the other side, the inclusion of behavioral information as an additional
financial and non-financial supplement is essential to provide a better image from economic
status of the organization (Bhimani and Langfield-Smith, 2007). As behavioral information
has a non-financial aspect, it is difficult to measure this type of information and its effect on
further behavior of investors. Any changes in economic, political or other conditions can
quickly affect the stock market and faces it with fluctuate. Therefore, it is necessary for
investors’ decision-making not to be only based on quantitative and rational analyzes, but
rather take into account factors caused by market expectations besides quantitative and
rational analyzes (Campbell and Shiller, 1988). Considering the factors arising from market
expectations is considered as behavioral finance.
Behavioral finance is part of the current issues of accounting and financial management
that examines the behavior of financial markets with a psychological approach (Sevil et al.,
2007; Barberis and Thaler, 2003). In other words, behavioral finance can be considered as the
integration of classical economics and psychology and decision-making. It is obvious that
behavioral finance does not attempt to show that rational behavior is false, but it is
attempting to demonstrate the application of psychological decision-making processes in the
identification and forecasting of financial markets (Lee et al., 2009). Harlow and Brown
(1990) consider the biological relationship to be unique to any investor, which explains his/
her investment behavior. Hence, individual characteristics play an important role in
decision-making. According to the fact that financial decisions of investors are affected by
internal and external behavioral factors, studies on behavioral finance have been growing
rapidly in recent years (Shefrin, 2000; Wärneryd, 2001). As an example, recognizing
psychological characteristics of investors in risk-taking (conservative and risk-taking) is
related to this field (Lee et al., 2009). In addition, understanding the personality traits of
investors is investigated in this field (Harlow and Brown, 1990).
In general, investors consider two important factors of risk and return at the time of
decision-making (Campbell, 1996). Despite major investors that have vast tools and facilities
to create a fit between these two variables, individual investors often lack such tools. In
addition, a high rate of economic and political fluctuations, the volatility of laws and
IJOES regulations, and [. . .] lead to increased risk of decision-making in the stock market
36,1 (Wärneryd, 2001). In conventional financial theory, investors choose their investment
strategies solely on the basis of risk-adjusted returns[1]. However, the risk level of investors
is not the same in practice and significantly depends on their individual attitudes toward
risk acceptance (Wärneryd, 2001).
Acquiring information on the balance between risk and returns is linked to the financial
14 literacy of the investor. In recent years, improving the financial literacy of investors
especially in developed countries has led to the benefits of various groups including
government, bankers, users, stakeholders, financial markets and other organizations. The
importance of improving literacy has been grown steadily because of factors such as new
financial products, the complexity of financial markets and changes in political,
demographic and economic factors (Hassan Al-Tamimi and Anood Bin Kalli, 2009). In a
study conducted by Atkinson and Messy (2011) investors in 12 countries, including the
USA, Britain, European countries, Australia and Japan through the survey showed that the
financial literacy of most investors is very low. This matter is a big challenge in investing
because the capital of people with low financial literacy mainly invested in a misplaced
position and leads to damages of the country’s economy. This challenge outlines the
direction of further studies in identifying and prioritizing factors influencing investors’
decision to buy stock in the stock market. Therefore, understanding the behavior of
investors is important for financial analysts to manage investors (Ramesh, 1991) and drive
investments toward profitability through understanding the psychology of investors and
overcoming their effects (Iyer and Bhaskar, 2002).
Therefore, it is necessary to identify and prioritize the factors affecting the decision-
making of investors to purchase shares of the stock exchange. As most of the previous
studies in Iran have only considered the financial dimension because of the availability of
information; in four financial, economic, political and psychological indicators of the market
have been analyzed in the present study to investigate the effective factors of decision-
making in investment. In the other words, the purpose of present study was to identify the
effective factors of decision-making of investors to buy stock in the stock market, as well as
weighing and analyzing the causal relationships of these factors.
Despite a few studies on determinants of investors’ decision-making to purchase stocks
from the Tehran Stock Exchange, no fuzzy approach has been conducted to analyze these
research factors; hence, the present research sought to use this approach in data analysis.
The results of research can clarify the determinants of decision-making on investment in
the stock exchange from investors’ perspective. Increasing the audiences’ knowledge about
the determinants of investment in the stock exchange was thus the outcome and innovation
of the present study. Therefore, it is expected that the results of research can provide
scientific innovation and knowledge creation as follows:

results of the present research can expand the theoretical principles of previous
research on the behavioral and investment fields on the stock exchange in
developing countries such as Iran;

results of the research indicate the most important factors affecting the individual
investment in the stock exchange. This can lead to a better understanding in
investors, capital market regulators, portfolio managers, brokers, financial analysts,
capital market researchers and other users of behavioral information, as well as
their decision-making; and

the present study also introduced a new scope of study for financial and accounting
researchers, particularly those who were active in the field of capital market studies,
 as well as the use of fuzzy logic instead of the definitive logic leading to closer-to-the Analyzing
reality results. causal
Firstly, the research results indicated that the experts paid more attention to the financial relationships
index than the economic, political and psychological indices of the market in determining
the priority of indices. Secondly, the analysis of sub-indices indicated that investors focused
on keeping track of political news and its impact on the stock market, and the susceptibility
of Tehran Stock Exchange to international economic development and financial ratios. 15
Investors also pay special attention to views of brokers and investment counseling
companies. Individual investors believe that brokers’ advice can be a good guide to buying
stocks. Thirdly, the present study provided comprehensive literature on determinants of
individual investment on the stock exchange.
The present study also provided the theoretical principles of factors influencing the
individual investment decision-making on buying stocks, as well as the research
background, and it then described the research methods, models and findings. Finally, it
presented discussion and conclusion, suggestions and limitations according to results.

2. Literature review
Investment means to buy an asset or anything else with the hope that it will increase in price
or generate revenue in the future (Knack and Keefer, 1995). According to Baker and Haslem
(1974) investors are divided into two general categories as follows:
(1) investors whose purpose is to make profits; and
(2) investors whose purpose is to increase capital.

Investment has been defined as taking advantage of relative advantages and potential
economic capacities. Investment is of particular importance in all countries of the world as
an engine for economic growth and development (Daniel et al., 2002). As the benefits of
investing are achieved in the future and there is no certainty about the realization of these
benefits, so a variety of investments face with some degree of probability of not realizing the
interests of the investor or the risk of investing (Daniel et al., 2002). Therefore, the investor
must have the required financial and non-financial accounting information and the ability to
analyze the information to create a balance between risk and return.
Information mean formed and modified data so that they are significant (meaningful)
and useful. Information is what can make a change in the mental system that receives it and
reduces irregularities (Lam et al., 2013). One of the fundamental prerequisites for securing
investors and creditors for productive economic activities is the provision of information
that is useful in making financial and economic decisions (Naimah, 2012). In this regard, the
responsibility of accounting information system is to gather data, processing, classification
and reporting of financial events with the aim of providing information about registration of
events and decision-making for the internal and external users of an organization
(Eldenburg et al., 2010). Investors need basic and technical analysis after access to
information. Therefore, the ability to analyze information is related to financial literacy.
Financial literacy is a combination of knowledge, skills, attitudes and financial behaviors
required for financial decision-making and ultimately, the achievement of individuals to
financially favorable situations (Atkinson and Messy, 2013). According to Van Rooij et al.
(2011) financial literacy is a collection of knowledge related to financial understanding,
which involves examining financial phenomena, nature, rules and relationships governing
it. Diversification and complexity in the nature of investment processes make it necessary
for investors to analyze and understand financial and non-financial information. Financial
IJOES illiteracy creates deceptive conditions and unfair competition in financial markets and leads
36,1 damage to the economy of any country.
Using financial literacy is useful when investors to have complete information. In other
words, the reported data must have behavioral information in addition to the accounting
information. It is necessary to provide information on the extent and manner of influencing
human behavior on the accounting system and investment decisions in addition to financial
16 information to realize the full disclosure (Lee et al., 2009; Luminita, 2014). Accounting reports
are not complete and they do not have the full information content without such information
(Ghani et al., 2011). Important sources of information used by investors in stock analysis and
buying and selling can be investigated in several dimensions. Through literature review,
this information can be categorized into four areas of financial, economic, political and
psychology of market.

2.1 Financial indicators

The financial indicator has been considered as the most important factor affecting
individual investment for the purchase of shares in the stock market (Al-Tamimi, 2006;
Nagy and Obenberger, 1994; Potter, 1971; Carr et al., 2010; Fazzari et al., 1988; Liu and
Pang, 2009). Researchers such as Carr et al. (2010), Fazzari et al. (1988) and Liu and Pang
(2009) argue that financial components are more attractive to investors compare to the
non-financial ones. However, Hunton et al. (2001) believe that investors do not pay much
attention to financial variables at the firm level. Chong and Lai (2011) have investigated
the importance of accounting information as effective factors of selecting stocks process
in Malaysia and found that accounting information is the second effective factor in this
process.
Nagy and Obenberger (1994) believe that classical wealth maximization criteria such as
estimated earnings, how to diversify portfolios and minimize risk are the most important
variables for investors. Al-Tamimi (2006) has considered the income of the company,
acceleration of the wealth, ability to sell shares, past performance of the company’s stock as
the most important financial sub-indicators effect on investing decision-making.
Accounting information factors include factors such as financial statements, annual
reports, stock quotes, valuation techniques and estimated earnings (Nagy and Obenberger,
1994). Luminita (2014) has argued that accounting information users carefully examine both
financial and non-financial information sections. Accounting information has the most effect
on the behavior of investors in UAE, Greece and India (Al-Ajmi, 2009; Merikas et al., 2011;
Maditinos et al., 2007; Dharmaja, 2012). The profit and loss statement and balance sheet are
the most important part of the annual report for investors in Saudi Arabia, Qatar and the
UAE (Al-Razeen and Karbhari, 2004; Alattar and Al-Khater, 2008; Alzarouni et al., 2012).
The results of Sultana and Pardhasaradhi (2012) in India showed that decision-making
variables in the accounting information section are the most important factors. The recent
movements in stock prices, estimated earnings, fluctuations/changes in stock indexes, stock
sale capability and past stock performance were identified as the most important indicators
in stock selection. Some of the important sub-indicators include financial ratios, dividends
per share (DPS), capital gains, risk-return ratios, earnings per share (EPS) and price/profit
ratio (P/E) are the belief in future flow of prices and return on past performance and the
assessment of the power of liquidity of the share (Merikas et al., 2011; Maditinos et al., 2007;
Dharmaja, 2012; Nagy and Obenberger, 1994; Al-Ajmi, 2009; Al-Razeen and Karbhari, 2004;
Alattar and Al-Khater, 2008; Alzarouni et al., 2012).
2.2 Economic indicators Analyzing
Baker and Haslem (2015) believe that investors significantly rely on future expectations and causal
in the meantime, pay close attention to historical factors. As a result, the future economic
prospects of the company, management quality and the future prospects of industry are
relationships
very important. The results of Clark-Murphy and Soutar (2004) indicated that the current
trends in stock prices, the nature of stocks, and in particular the perception of investors of
corporate governance toward financial components such as dividends, the ratio of prices to
earnings and returns for individual investors have been much paid attention. In a study 17
conducted by Iqbal and Usmani (2009), it was identified that individual investors do not use
valuation models when valuing stocks but they take consider current economic indicators
such as GDP, inflation rates and among others. The main economic sub-indicators include
the knowledge of the average interest rate of bank deposits, the evaluation of the return on
investment in the stock exchange compared to other markets, the average inflation rate and
its flow and Tehran Stock Exchange are affected by international economic developments
(Iqbal and Usmani, 2009; Baker and Haslem, 2015; Clark-Murphy and Soutar, 2004; Hunton
et al., 2001).

2.3 Political indicators

Hutchinson and Hutchinson (1997) believe that the influence of political factors varies from
country to country. Chong and Lai (2011) found that information can be considered as the
most important factor if it is impartial in Medias. They also found that the factor has a
positive relationship with estimated returns. Oberlechner and Hocking (2004) found that
investors are more likely to follow news stories and their predicted effects compared to the
accuracy of the news and this fact shows the impact of the media on investor behavior.
Tetlock (2007) concluded that excessive mistreatment in the media leads to a decline in stock
price. Hunton et al. (2001) investigated the effect of market flow and economic and political
factors on investor decision-making and concluded that news and rumors have a great
influence on the decision-making of investors and they do not pay much attention to
financial variables at the firm level. The most important political sub-indicators include the
pursuit of political news and its impact on the stock market, the impact of domestic and
foreign political changes on stock indices and the impact of the political relations of
countries on stock prices (Oberlechner and Hocking, 2004; Tetlock, 2007; Hunton et al., 2001;
Yahyazadehfar et al., 2009).

2.4 Psychosocial indicators

In their study, Nagy and Obenberger (1994) investigated factors including recommendations
from brokerage firms, individual brokerage firms, friends and colleagues as psychological
factors of market and concluded that investors pay little attention to these factors. Religious
reasons, family members “opinions and advocates” recommendations such as brokerage
firms, friends and acquaintances as market psychosocial factors have little influence on
decision-making of investors (Al-Tamimi, 2006; Sultana and Pardhasaradhi, 2012; Chong
and Lai, 2011; Merikas et al., 2011). However, in Hassan Al-Tamimi and Anood Bin Kalli
(2009) viewpoint, religious reasons are the most effective factor of investment decision-
making in the UAE and rumor has the least effect on investment. In addition,
recommendation of advocates such as brokerage firms, friends and acquaintances in
Malaysia have been known as the most influential factor in the study of investor behavior
(Chong and Lai, 2011). Shiller and Pound (1989) found that those who buy with immediate
price increases follow their friends and relatives more than the recommendations of stock
brokers.
IJOES The results of the study conducted by Maditinos et al. (2007) indicated that investors
36,1 consider their experience as the most important factor in analyzing foreign financial
markets. Professional investors rely heavily on their basic and technical analysis and less on
portfolio analysis. In general, it seems that investors mainly focus on their fundamental and
technical analysis more than the portfolio (Naser and Nuseibeh, 2003; Wong and Cheung,
1999; Clark-Murphy and Soutar, 2004; Hodge, 2003; Daniel et al., 2002; Davar and Gill, 2007).
18 The most important psychological indicators of the market include news published in
newspapers and magazines, comments from stockholders about the future of the market, the
advice of friends and acquaintances, rumors and published news and the views of brokers
and investment consulting companies (Al-Tamimi, 2006; Nagy and Obenberger, 1994;
Sultana and Pardhasaradhi, 2012; Chong and Lai, 2011).
2.3.1 Fuzzy theory. Measurement criteria for people and under measuring subjects differ
based on organizational behavior and research needs, but the process and method of
measurement is always constant. In this process, the individual or persons with adequate
expertise in the questioned area convert qualitative information into distinct values, while
the methods ignore the ambiguities associated with judging individuals and changing their
value when moving to numbers (Chakraborty, 1995; Korol, 2014).
In a fuzzy set, the members belong to the set with a membership degree. The required
information is expressed numerically when it is quantitative. However, information cannot
be expressed in exact numbers when the research is carried out in a qualitative area and
with ambiguous knowledge, so it has been stated in most of the studies that managers
cannot provide a precise number for expressing their opinions and they, therefore, use
verbal assessment instead of certain numerical values (Beach et al., 2000).
Therefore, the approximate logic (also called fuzzy logic) is in the qualitative form in
most cases (Pany and Zhang, 2013). Generally, a proper verbal phrase is set up to explain the
ambiguity of the knowledge based on the subject area. Subsequently, the concept of phrases
is identified through fuzzy numbers, which defined at the range of [0, 1] and by membership
function. As verbal evaluation is done by individuals, it can be said that triangular and
trapezoidal membership functions are suitable for confrontation with the ambiguity of these
types of evaluations and effort to achieve more precise quantities is impossible and
unnecessary (Delgado et al., 1998).
A type-2 fuzzy set gives the size of the dispersion (variance) around a language
uncertainty more than a type-1 with simple membership in the face of linguistic
uncertainties for providing information. In fact, type-1 fuzzy set is the first-order
approximation of uncertainty and type-2 fuzzy set is a second-order approximation of
uncertainty. In this way, uncertainty can be completely approximated by extending the
fuzzy type-3 and type-4 to the infinite-type fuzzy set. Type-2 fuzzy set is a fuzzy set with
fuzzy membership degree. Such a set is useful where it is difficult to determine exactly the
degree of membership for a fuzzy set. Type-2 fuzzy system is resistant to the uncertainties
created in fuzzy rules or system parameters (Mohammadi and Javidan, 2017).
Currently, type-2 fuzzy sets are developed as an important theory in environments with
high uncertainty. One of the fuzzy logic applications is designing a fuzzy logic model to
forecast the currency rate (Korol, 2014). Costea (2014) has used from fuzzy logic to forecast
financial performance. Mandic et al. (2014) financial parameters of Serbian banks have been
analyzed using fuzzy analytical hierarchy process (AHP) and technique for order of
preference by similarity to ideal solution (TOPSIS) methods. Fuzzy concept has been
considered in Ravi et al. (2017) to examine the financial services. Lassala et al. (2016) have
provided alternatives approaches for the higher efficiency of independent financial advisers
using fuzzy analysis. Although fuzzy logic has ever been used in numerous studies in the
field of accounting but type-2 fuzzy has rarely been used. In present study, multi-criteria Analyzing
decision-making techniques in type-2 fuzzy environments have been used to analyze the causal
causal relationships and weighing the factors affecting individual investment in purchasing
stock in the stock market.
relationships

3. The proposed approach

The research aimed to identify and rank factors effect on the decision-making of individual 19
investors to purchase shares in Tehran Stock Exchange. Experts on investment in Tehran
Stock Exchange, Iran were selected as case studies. Literature, similar studies, and opinions
of experts were used to identify the factors. According to the identified factors, hierarchical
tree is drawn. Type-2 fuzzy AHP and type-2 fuzzy decision making trial and evaluation
laboratory (DEMATEL), used in the study by Abdullah and Zulkifli (2015), were used to
determine the cause-and-effect relationship of factors affect on the decision-making of
individual investors to purchase shares in Tehran Stock Exchange.
The intended integration method is basically hybridizing the two methods where the
output from Method 1 is used as a multiplying factor to the computational steps of Method
2. The integration of type-2 fuzzy AHP and type-2 fuzzy DEMATEL is constructed without
losing the generality of the fuzzy AHP and fuzzy DEMATEL. Based on the objective and
approach, the study consists of three-phase.

3.1 Phase 1. Determining the weights of the factors and sub-factors using type-2 fuzzy AHP
technique
As uncertainty is one of the most common problems of decision-making, fuzzy decision-
making methods were developed to address this problem (Ting, 2016). This method allows
decision-makers to express their priorities and opinions by fuzzy numbers and include
uncertainty in their judgments in these cases. In this study, to determine the weights of the
factors and sub-factors, a hierarchical type-2 fuzzy method is used in which the fuzzy
numbers are trapezoidal. The steps of this technique are as follows:
Step 1. Drawing the hierarchical graph:
The hierarchical structure consists of two levels, the upper level consists of the factors
and the lower-level consists of the indicators (sub-factors), which effect the decision-making
of individual investors to purchase shares in Tehran Stock Exchange.
Step 2. Creating the matrix of pair-wise comparisons using type-2 trapezoidal fuzzy numbers:
In this step, experts are asked to express their opinions about the pair-wise comparison of
factors affect on the decision-making of individual investors to purchase shares in Tehran
Stock Exchange based on Figure 1, using the linguistic variables in Table I.
In the mentioned table, the reverse type-2 trapezoidal fuzzy number is obtained using
equation (1).
~~
Matrix Ais obtained for the factors and sub-factors using equation (1):
2 3
2 3 1 ~~a 12    ~~a 1n
6  7
1 ~~a12    ~~a 1n 6 ~~a12 ~~a 2n 7
6~ 7 6 1 1    7
~~ 6 ~a21 1    ~a~2n 7 6 7
A ¼6 6 .. .. .. 7 ¼
.. 7 6 .6
. . .
7 (1)
4 . . . . 5 6 .. .. .. .. 77
6  7
~~a n1 ~~a n2    1 4 5
1 ~~a12 1 ~~a12    1

where
IJOES
Financial ratios C 11
36,1
Dividends per share (DPS) C 12

Capital gains C 13

Risk-return ratios C 14
20
Earnings per share (EPS) C 15 Financial indicators C 1

Price / profit ratio (P/E) C16

The belief in future flow of prices and return on past performance c17

The assessment of the power of liquidity of the share c18

effective factors on the decision making

The knowledge of the average interest rate of bank deposits c21
The evaluation of the return on investment in stock exchange
compared to other markets c22
Economic Indicators C 2
The average inflation rate and its flow c23
Tehran Stock Exchange are affected by international economic
developments c24

The pursuit of political news and its impact on the stock market

The impact of domestic and foreign political changes on stock indices c32 Political Indicators C 3

The impact of the political relations of countries on stock prices

Figure 1. News published in newspapers and magazines c41

The hierarchical tree
of effective factors on Comments from stockholders about the future of the market c42
the decision-making Psychosocial indicators C4
of individual The advice of friends and acquaintances c43
investors to purchase Rumors and published news c44
shares in Tehran
Stock Exchange The views of brokers and investment consulting companies c45

Linguistic variables Trapezoidal interval type-2 fuzzy scales

Absolutely strong (7, 8, 9, 9; 1, 1) (7.2, 8.2, 8.8, 9; 0.8, 0.8)

Very strong (5, 6, 8, 9; 1, 1) (5.2, 6.2, 7.8, 8.8; 0.8, 0.8)
Fairly strong (3, 4, 6, 7; 1, 1) (3.2, 4.2, 5.8, 6.8; 0.8, 0.8)
Table I. Slightly strong (1, 2, 4, 5; 1, 1) (1.2, 2.2, 3.8, 4.8; 0.8, 0.8)
Type-2 trapezoidal Exactly equal (1, 1, 1, 1; 1, 1) (1, 1, 1, 1; 1, 1)
fuzzy number
linguistic variables Source: Kahraman et al. (2014)
 0 ! 1
 u  u    ! Analyzing
1 1 1 1 1 1 1 1
1~a~ ¼ @ ; ; ; ; H1 a12 ; H2 a13 ; l ; l ; l ; l ; H1 a12 ; H2 a13 A
l l
causal
au14 au13 au12 au11 a24 a23 a22 a21
relationships
Step 3. Checking the compatibility of the pair-wise comparison matrix: h i
Suppose A = [aij] is a positive interaction matrix and A ~~ ¼ ~a~ij is the type-2
h i 21
~~ ¼ ~a~ij it may also
fuzzy positive interaction matrix. Now, if A = [aij] is compatible, then A
be compatible. To calculate the compatibility of the type-2 trapezoidal fuzzy pair-wise
comparison matrix using equation (2), type-2 fuzzy numbers are turned into certain numbers
(Kahraman, Öztays i, Uçal Sarı and Turano glu, 2014). Then, we calculate the inconsistency
rate for the certain matrix of pair-wise comparison:
0 1
ðUu  Lu Þ þ ð b u  m1u  Lu Þ þ ðau  m2u  Lu Þ
1B þ Lu C
E ðU Þ ¼ DTraT ¼ B@
4 C
A
2 ð U l  Ll Þ þ ð b l  m 1l  Ll Þ þ ð a l  m 2l  Ll Þ
þ þ Ll
4
(2)

Step 4. Aggregating the experts’ matrix of pair-wise comparisons: experts’ pair-wise

comparison matrix is Aggregated using equation (3):

h i1k
~r~ij ¼ ~a~ij1  ~a~ij2      ~a~ijk i; j ¼ 1; 2; . . . ; n (3)

where K denotes the number of decision-makers.

Step 5. The geometric mean of each row is calculated and then the fuzzy weights are
computed by normalization. The geometric mean of each row ~r~i is calculated as
follows:

 1
~r~i ¼ ~a~i1  ~a~i2  . . .  ~a~in n i ¼ 1; 2; . . . ; n (4)

where
qffiffiffiffiffi pffiffiffiu pffiffiffiu pffiffiffiu pffiffiffiu  pffiffiffil pffiffiffil pffiffiffil pffiffiffil
~a~ij ¼ ~a~ij1 ; ~a~ij2 ; ~a~ij3 ; ~a~ij4 ;H1u ðaij Þ; H1u ðaij Þ ; ~a~ij1 ; ~a~ij2 ; ~a~ij3 ; ~a~ij4 ;H1l ðaij Þ; H1l ðaij Þ
n n n n n n n n n

Step 6. Calculating the fuzzy weights: the fuzzy weight of each factor and sub-factors is
obtained from equation (5):
 1
~~j ¼ ~r~j  ~r~1  ~r~2  . . .  ~r~n
w (5)

where
 0 ! 1
IJOES au1 au2 au3 au4  u   u 
B uð Þ
; ; ; ; min H1 ðaÞ; H1 b ; min H2 ðaÞ; H2 b uð Þ
;C
36,1 ~a~ B bu4 bu3 bu2 bu1 C
B ! C
¼B     C
~
~b B al1 al2 al3 al4 C
@ ; ; ; ; min H l
ð aÞ; H lð Þ
b ; min H l
ð aÞ; H lð Þ
b A
l l l l 1 1 2 2
b4 b3 b2 b1

22 Step 7. Calculating the total weights of the sub-factors: Then, based on equation (6), the total
weights of the sub-factors are obtained:

U ~~ j~r~ij
~~ i ¼ W 8i (6)

In which W~~ j is the j-th factor’s type-2 fuzzy weight and r~~ij is the type-2 fuzzy weight of the
sub-factors related to the j-th factor.
Step 8. Defuzzifying and normalizing the fuzzy weights: Using equation (7), the defuzzified
weights of factors and sub-factors are obtained (Kahraman, Öztays i, Uçal Sarı and
Turanog lu, 2014):
0 1
ðUu  Lu Þ þ ð b u  m1u  Lu Þ þ ðau  m2u  Lu Þ
1B þ Lu C
E ðU Þ ¼ DTraT ¼ B @
4 C
A
2 ðUl  Ll Þ þ ð b l  m1l  Ll Þ þ ðal  m2l  Ll Þ
þ þ Ll
4
(7)

3.2 Phase 2. The relationship between factors using type-2 fuzzy DEMATEL technique
The most important characteristic of the DEMATEL method is that it is a multi-criteria
decision-making method with the ability to build relationships and structures between
factors. In addition to turning causal relationships into a visual-structural model, this
technique can identify internal dependencies between elements and make them
understandable (Wu, 2008). In general, estimating the expert opinions in exact numerical
values, especially in conditions of uncertainty, is very difficult because the results of their
decisions heavily depend on inaccurate and ambiguous subjective judgment. This is why
fuzzy logic is required in the DEMATEL method. As a result, in the fuzzy DEMATEL
technique, type-2 fuzzy linguistic variables are used and this facilitates decision-making in
environmental uncertainty conditions (Abdullah and Zulkifli, 2015). The steps of this
technique are mentioned below (Table II):

Linguistic variables IT2 FN

Very high influence ([0/8, 0/9, 0/9.1/0; 1, 1], [0/85, 0/9.0/9, 0/95; 0/9, 0/9])
High influence ([0/6, 0/7, 0/7, 0/8; 1, 1], [0/65, 0/7, 0/7, 0/75; 0/9, 0/9])
Low influence ([0/4, 0/5, 0/5, 0/6; 1, 1], [0/45, 0/5, 0/5, 0/55; 0/9, 0/9])
Very low influence ([0/2, 0/3, 0/3, 0/4; 1, 1], [0/25, 0/3, 0/3, 0/35; 0/9, 0/9])
No influence ([0, 0/1, 0/1, 0/1; 1, 1], [0, 0/1, 0/1, 0/05; 0/9, 0/9])
Table II.
Linguistic variables Source: Abdullah and Najib (2014)
Step 9. Creating the initial direct relationship matrix (A): Questionnaires are prepared and Analyzing
distributed among experts about the level of influence of each factor on other factors, causal
and after gathering expert opinions and using Table III, data is converted into type-2
trapezoidal fuzzy numbers and the initial direct relationship matrix is determined using
relationships
equation (8):

1X H
Aij ¼ xk (8) 23
H k¼1 ij

H represents the number of experts.

xkij is trapezoidal type-2 fuzzy number and represents the score given by the K-th expert
and shows the penetration level of criteria i to criteria j.
Step 10. Calculating the normalized initial direct-relation matrix (D): the initial direct
relationship matrix is obtained using equations (9) and (10):

A
D¼ (9)
S
!
X
n X
n
S ¼ max max Aij ; max Aij (10)
1#j#n 1#j#n
j¼1 i¼1

Step 11. Construct the n  n matrix (ZX): Using equation (11), matrix ZX is arranged from
initial direct-relation matrix (D).
2 3
0 x12  x1n
6 7
6 x21 0  x2n 7
6 7
ZX ¼ 6
6 .. .. ..
7
.. 7 (11)
6 . . . . 7
4 5
xn1 xn2  0

where
x = (UMF, LMF) = ([a, b, c, d], [g, h, i, j]), of which eight n  n matrixes are derived with
unfuzzy numbers as elements. The reason for writing matrix D as eight matrixes is the ease
of calculations in the next step. It should be noted that the number of rows in the matrix Z =
[ZX] is equal to the number of columns of the matrix D.
Step 12. Attaining the total-influence matrix (TX): We obtain the factors’ total-influence
matrix using equation (12) where I is the identity matrix.
1
TX ¼ ZX ðI  ZX Þ (12)

Step 13. Analyzing the causal relationships: The sum of each row elements (D) for each factor
indicates the impact of that factor on other factors in a system. Furthermore, the sum of each
column elements (R) for each factor indicates the impact of that factor on other factors in a
system. Therefore, the horizontal vector (D þ R) specifies the severity of interaction for a given
factor in the system. In other words, the greater the value of (D þ R) factor is, more interaction
with other factors operating in the system will be. The vertical vector (D  R) shows the degree
 24
36,1

matrix
IJOES

Table III.

wise comparison
Aggregated pair-
Factors C1 C2 C3 C4

C1 ([1, 1, 1, 1; 1, 1], [1, 1, 1, 1; 0.8, 0.8])
C2 ([0.178, 0.22, 0.397, 0.691; 1, 1],
[0.188, 0.226, 0.365, 0.598; 0.8,
0.8])
C3 ([0.119, 0.142, 0.193, 0.236; 1, 1],
[0.122, 0.142, 0.183, 0.224; 0.8,
0.8])
C4 ([0.11, 0.11, 0.13, 0.14; 1, 1], [0.11,
0.11, 0.12, 0.14; 0.8, 0.8])
([1.442, 2.52, 4.579, 5.593; 1, 1],
[1.664, 2.729, 4.375, 5.391; 0.8,
0.8])
([1, 1, 1, 1; 1, 1], [1, 1, 1, 1; 0.8, 0.8])
([0.178, 0.22, 0.397, 0.691; 1, 1],
[0.188, 0.226, 0.365, 0.598; 0.8,
0.8])
([0.119, 0.142, 0.193, 0.236; 1, 1],
[0.122, 0.142, 0.183, 0.224; 0.8,
0.8])
([3.557, 4.579, 6.604, 7.612; 1, 1],
[3.762, 4.782, 6.402, 7.41; 0.8, 0.8])
([1, 2, 4, 5; 1, 1], [1.2, 2.2, 3.8, 4.8;
0.8, 0.8])
([1, 1, 1, 1; 1, 1], [1, 1, 1, 1; 0.8, 0.8])
([0.342, 0.397, 0.63, 1; 1, 1], [0.353,
0.407, 0.587, 0.883; 0.8, 0.8])
([7, 8, 9, 9; 1, 1], [7.2, 8.2, 8.8, 9; 0.8,
0.8])
([1.71, 2.884, 5.04, 6.082; 1, 1],
[1.956, 3.108, 4.829, 5.875; 0.8,
0.8])
([1, 1.587, 2.52, 2.924; 1, 1], [1.129,
1.692, 2.435, 2.846; 0.8, 0.8])
([1, 1, 1, 1; 1, 1], [1, 1, 1, 1; 0.8, 0.8])
of importance of each factor. Generally, if (D  R) is positive, a variable is a cause. If it is negative, Analyzing
it is an effect that are shown in equations (13)-(15): causal
TX ¼ ½tij mn i; j ¼ 1; 2; . . . ; n (13) relationships

" #
X
n
D ¼ rX ¼ tij (14) 25
j¼1 n1¼½ti n1

" #
X
n
R ¼ cX ¼ tij (15)
j¼1 1n¼½ti 1n
Step 14. Calculating the certain values E(W): For the obtained D þ R and D  R values in the
previous step, we calculate the certain values using equation (16):
! !
4  
1 1X 1 X 2 
ð Þ ð Þ

E ðW Þ ¼ Wi þ Wi
L L
 Wi A þ Wi A
L U
(16)
2 4 i¼1 4 i¼1

in which
           
W ¼ WiU þ WiL ¼ W1U ; W2U ; W3U ; W4U ; H1 WiU ; H2 WiU ; W1L ; W2L ; W3L ; W4L ; H1 WiL ; H2 WiL

Step 15. Combining the fuzzy weights and E(W): We combine the fuzzy weights obtained
from Step 8 of Phase 1 with the values of E(W) associated with each factor and sub-factor to
obtain new values. To do this, we use equation (17):

new E ðW Þ ¼ E ðUi Þ  E ðW Þ (17)

Step 16. Designing the causal diagram: We draw the causal diagram of the factors and all the
sub-factors.

4. Results of the research

In the current section, the results of the data collection of research are presented.

4.1 Phase 1. Determining the fuzzy weights using type-2 fuzzy AHP technique
Step 1. Drawing a hierarchical tree: In this study, factors affecting the decision of individual
investors to purchase shares of Tehran Stock Exchange have been selected based on
research literature in the area of investment in the stock exchange and interview with
experts. In total, 23 indicators were identified by reviewing the literature and similar studies.
In the next step, three indicators of the industry type, government policies and free float
percentage were removed from these 23 indicators and 20 indicators confirmed after
designing the questionnaire and interview with experts, then, the weights and causal
relationships of indicators and sub-indicators were surveyed using the designed
questionnaire. Experts of present study were selected using snowball sampling method
because of the limited access. Snowball sampling is a non-probabilistic sampling method for
cases where the understudy units are not easily identifiable, especially when these units are
very scarce or belong to the small part of a very large society (Stivala et al., 2016; Pattison
IJOES et al., 2013). The experts participated in present study work in Tehran Stock Exchange with
36,1 an average working experience of 18 years. The experts had averagely 15 years of teaching
in Iran universities in the field of investment in exchange market. The number of these
experts was 35. The current level of scientific knowledge of these experts because of their
relationship with the university and their activities in the Tehran Stock Exchange indicated
that the experts were sufficiently qualified in the subject matter of present study.
26 Based on the identified factors, the hierarchical tree of the research was obtained, as
shown in Figure 1.
Step 2. Creating the pair-wise comparison matrix using type-2 fuzzy numbers: In this step,
the pair-wise comparison questionnaire was designed and distributed among the experts of
investment. After collecting data, linguistic variables are turned into type-2 fuzzy numbers
using Table I.
Step 3. Checking the compatibility of the pair-wise comparison matrix: To check the
compatibility of the pair-wise comparison matrix, first, the defuzzified values of the
pair-wise comparison matrixes of factors and sub-factors were determined using
equation (2). Then, the incompatibility rate of each of the matrixes was investigated.
The results showed that the incompatibility rate of all eight pair-wise comparison
matrixes was less than 0.1.
Step 4. Aggregating the experts’ pair-wise comparison matrix: Experts’ pair-wise
comparison matrixes were aggregated using equation (3). In Table III, the pair-wise
comparison matrix of the factors is given as an example.Step 5. Geometric mean of each row
of defuzzified pair-wise comparison matrices is calculated using equation (4). For the
representative calculations, Table III is used, which includes the type-2 fuzzy sets of pair-
wise comparisons for the factors. The results show in Table IV.

Factors Geometric mean

C1 ([2.448, 3.1, 4.062, 4.424; 1, 1], [2.591, 3.216, 3.962, 4.354; 0.8, 0.8])
Table IV. C2 ([0.742, 1.061, 1.682, 2.141; 1, 1], [0.815, 1.114, 1.609, 2.026; 0.8, 0.8])
The geometric mean C3 ([0.381, 0.472, 0.663, 0.831; 1, 1], [0.401, 0.483, 0.635, 0.785; 0.8, 0.8])
of factors C4 ([0.259, 0.281, 0.355, 0.426; 1, 1], [0.262, 0.283, 0.337, 0.408; 0.8, 0.8])

Factors ~~r ij ~~ j
W E(U)

C1 ([2.448, 3.1, 4.062, 4.424; 1, 1], [2.591, 3.216, ([0.313, 0.458, 0.827, 1.155; 1, 1], 0.648
3.962, 4.354; 0.8, 0.8]) [0.342, 0.492, 0.778, 1.07; 0.8, 0.8])
C2 ([0.742, 1.061, 1.682, 2.141; 1, 1], [0.815, ([0.095, 0.157, 0.342, 0.559; 1, 1], 0.268
1.114, 1.609, 2.026; 0.8, 0.8]) [0.108, 0.17, 0.316, 0.498; 0.8, 0.8])
Table V. C3 ([0.381, 0.472, 0.663, 0.831; 1, 1], [0.401, ([0.049, 0.07, 0.135, 0.217; 1, 1], 0.109
The fuzzy and 0.483, 0.635, 0.785; 0.8, 0.8]) [0.053, 0.074, 0.125, 0.193; 0.8,
certain weights of the 0.8])
C4 ([0.259, 0.281, 0.355, 0.426; 1, 1], [0.262, ([0.033, 0.042, 0.072, 0.111; 1, 1], 0.06
factors affecting
0.283, 0.337, 0.408; 0.8, 0.8]) [0.035, 0.043, 0.066, 0.1; 0.8, 0.8])
decision-making of ~~c 1  ~~c 2  . . .  ~~c n ([3.83, 4.913, 6.761, 7.823; 1, 1], [4.069,
investors to purchase  1 5.096, 6.543, 7.574; 0.8, 0.8])
shares in Tehran ~~c 1  ~~c 2  . . .  ~~c n ([0.128, 0.148, 0.204, 0.261; 1, 1], [0.132,
Stock Exchange 0.153, 0.196, 0.246; 0.8, 0.8])
Step 6. Calculating the type-2 fuzzy weights: Using equation (5), the fuzzy weights of the Analyzing
factors were determined. The calculated values for the factors are depicted in Table VI. causal
Step 7. Calculating the total weight of sub-factors: Based on equation (6), the total weight
of the sub-factors were determined as shown in Table VI.
relationships
Step 8. Defuzzifying and normalizing the type-2 fuzzy weights: Using equation (7), the
defuzzified weights of the sub-factors that effect on the decision-making of individual investors
to purchase shares in Tehran Stock Exchange are shown in the last column of Table VI.
27
4.2 Phase 2. The relationship between the factors using type-2 fuzzy DEMATEL technique
Step 9. Creating the initial direct relationship matrix (A): After determining the certain
weights of the factors, the questionnaire about the level of influence of each factor on other
factors was prepared and distributed among Experts, and after gathering the Experts’
opinions and using Table III, the linguistic data was turned into type-2 trapezoidal fuzzy
numbers. Then, the initial direct relationships matrix was determined using equation (8). As
an example, the initial direct relationships matrix of the factors affecting the decision-
making of investors to purchase shares in Tehran Stock Exchange is shown in Table VII.
Step 10. Calculating the normalized initial direct-relation matrix (D): Using equations (9) and
(10), the normalized matrix is determined. This matrix is shown in Table VIII.
Step 11. Creating the matrix Za, Zb, Zc, Zd, Zf, Zg and Zh: Using equation (11), eight n  n
matrixes are derived from matrix D as, Za, Zb, Zc, Zd, Zf, Zg and Zh, so the next step can be
calculated easily. The matrix Za is shown as an example in Table IX.
Step 12. Attaining the total-influence matrix (TX): The total-influence matrix was
obtained using equation (12). The total-influence matrix of the implementation factors of
organizational justice is shown in Table X and Table XI. Based on the mentioned equation,
the total-influence matrix of the sub-factors was determined as a 20  20 matrix.
Step 13. Analyzing the causal relationships: The sum of the elements of the rows and
columns was calculated to obtain the analysis of the causal relationships. Equations (13)-(15)
were used to determine the values of D þ R and D – R. The results for the factors and the
sub-factors are shown in Tables XI and XII, respectively.
Step 14. Calculating the certain values of D þ R and D  R for the factors and sub-factors
E(W): Using equation (16), the certain values were obtained for implementation factors and
the sub-factors of decision-making of investors to purchase shares in Tehran Stock
Exchange. The results are shown in Tables XI and XII.
Step 15. Combining the fuzzy weights of E(U) and E(W): Using equation (17), the fuzzy
weights obtained in Step 8 are combined with the certain values obtained in Step 14. The
values are shown in Tables XI and XII.
Step 16. Designing the causal diagram: The causal diagrams of the factors and the sub-
factors effect on the decision-making of individual investors to purchase shares in Tehran
Stock Exchange are shown in Figures 2 and 3.

5. Discussion
The expansion and diversification of economic activities has led to the expansion of the
capital market and scope of the activities in the joint-stock companies (Mohamed Saat et al.,
2012). The capital market is a place that can create the basis for capital formation and
provides the necessary means for transferring the funds of people into investment
opportunities with its desirable performance. The stock exchange is the central component
of financial system in any country and is an integral part of it. This market follows the
organized practices for trading in securities and increases the number of available
IJOES Factors Sub-factors ~~r ij ~~ i
U E(U)
36,1
C1 C11 ([3.18, 4.031, 5.433, 6.03; 1, 1], [3.361, 4.189, ([0.182, 0.273, 0.52, 0.738; 1, 1], 0.403
5.29, 5.913; 0.8, 0.8]) [0.2, 0.294, 0.488, 0.682; 0.8, 0.8])
C12 ([0.256, 0.307, 0.438, 0.565; 1, 1], [0.265, ([0.015, 0.021, 0.042, 0.069; 1, 1], 0.034
0.313, 0.413, 0.53; 0.8, 0.8]) [0.016, 0.022, 0.038, 0.061; 0.8,
0.8])
28 C13 ([0.466, 0.602, 0.893, 1.133; 1, 1], [0.496, ([0.027, 0.041, 0.085, 0.139; 1, 1], 0.068
0.619, 0.854, 1.07; 0.8, 0.8]) [0.03, 0.043, 0.079, 0.124; 0.8, 0.8])
C14 ([0.865, 1.109, 1.632, 2.035; 1, 1], [0.92, ([0.05, 0.075, 0.156, 0.249; 1, 1], 0.123
1.146, 1.567, 1.934; 0.8, 0.8]) [0.055, 0.08, 0.145, 0.223; 0.8, 0.8])
C15 ([1.13, 1.491, 2.204, 2.701; 1, 1], [1.208, ([0.065, 0.101, 0.211, 0.331; 1, 1], 0.165
1.553, 2.119, 2.579; 0.8, 0.8]) [0.072, 0.109, 0.195, 0.298; 0.8,
0.8])
C16 ([1.768, 2.296, 3.27, 3.855; 1, 1], [1.884, 2.39, ([0.101, 0.156, 0.313, 0.472; 1, 1], 0.244
3.159, 3.719; 0.8, 0.8]) [0.112, 0.168, 0.291, 0.429; 0.8,
0.8])
C17 ([0.166, 0.189, 0.256, 0.319; 1, 1], [0.17, 0.19, ([0.01, 0.013, 0.024, 0.039; 1, 1], 0.02
0.242, 0.302; 0.8, 0.8]) [0.01, 0.013, 0.022, 0.035; 0.8, 0.8])
C18 ([0.339, 0.431, 0.637, 0.822; 1, 1], [0.359, ([0.019, 0.029, 0.061, 0.101; 1, 1], 0.049
0.442, 0.607, 0.772; 0.8, 0.8]) [0.021, 0.031, 0.056, 0.089; 0.8,
0.8])
C2 C21 ([0.371, 0.458, 0.609, 0.696; 1, 1], [0.387, ([0.047, 0.065, 0.111, 0.15; 1, 1], 0.088
0.467, 0.584, 0.674; 0.8, 0.8]) [0.05, 0.069, 0.103, 0.14; 0.8, 0.8])
C22 ([0.215, 0.237, 0.306, 0.373; 1, 1], [0.218, ([0.027, 0.034, 0.056, 0.08; 1, 1], 0.046
0.238, 0.289, 0.355; 0.8, 0.8]) [0.028, 0.035, 0.051, 0.074; 0.8,
0.8])
C23 ([2.432, 2.954, 3.67, 3.923; 1, 1], [2.55, 3.045, ([0.309, 0.421, 0.666, 0.847; 1, 1], 0.531
3.596, 3.875; 0.8, 0.8]) [0.333, 0.447, 0.635, 0.804; 0.8,
0.8])
C24 ([1.615, 1.861, 2.426, 2.877; 1, 1], [1.666, ([0.205, 0.265, 0.44, 0.621; 1, 1], 0.36
1.908, 2.351, 2.76; 0.8, 0.8]) [0.217, 0.28, 0.415, 0.573; 0.8, 0.8])
C3 C31 ([3.035, 3.409, 4.053, 4.327; 1, 1], [3.112, ([0.518, 0.635, 0.921, 1.125; 1, 1], 0.758
3.481, 3.986, 4.273; 0.8, 0.8]) [0.541, 0.663, 0.887, 1.081; 0.8,
0.8])
C32 ([0.269, 0.3, 0.395, 0.497; 1, 1], [0.274, 0.303, ([0.046, 0.056, 0.09, 0.129; 1, 1], 0.075
0.376, 0.468; 0.8, 0.8]) [0.048, 0.058, 0.084, 0.118; 0.8,
0.8])
C33 ([0.541, 0.689, 0.92, 1.038; 1, 1], [0.568, ([0.092, 0.128, 0.209, 0.27; 1, 1], 0.165
0.708, 0.888, 1.008; 0.8, 0.8]) [0.099, 0.135, 0.198, 0.255; 0.8,
0.8])
C4 C41 ([0.206, 0.237, 0.327, 0.425; 1, 1], [0.211, ([0.018, 0.025, 0.046, 0.071; 1, 1], 0.037
0.239, 0.31, 0.397; 0.8, 0.8]) [0.02, 0.026, 0.042, 0.064; 0.8, 0.8])
C42 ([0.705, 0.844, 1.199, 1.533; 1, 1], [0.738, ([0.063, 0.088, 0.168, 0.258; 1, 1], 0.135
0.865, 1.151, 1.444; 0.8, 0.8]) [0.069, 0.093, 0.157, 0.233; 0.8,
Table VI. 0.8])
The fuzzy and C43 ([0.429, 0.497, 0.664, 0.809; 1, 1], [0.442, ([0.038, 0.052, 0.093, 0.136; 1, 1], 0.075
certain weights of the 0.505, 0.636, 0.77; 0.8, 0.8]) [0.041, 0.055, 0.087, 0.124; 0.8,
0.8])
sub-factors affecting
C44 ([1.515, 1.84, 2.58, 3.139; 1, 1], [1.585, 1.899, ([0.136, 0.193, 0.362, 0.528; 1, 1], 0.286
decision-making of 2.49, 3.001; 0.8, 0.8]) [0.147, 0.205, 0.34, 0.485; 0.8, 0.8])
investors to purchase C45 ([3.09, 3.705, 4.779, 5.245; 1, 1], [3.216, ([0.277, 0.388, 0.671, 0.882; 1, 1], 0.524
shares in Tehran 3.823, 4.669, 5.153; 0.8, 0.8]) [0.299, 0.413, 0.637, 0.832; 0.8,
Stock Exchange 0.8])
Factors C1 C2 C3 C4

C1 ([0, 0.1, 0.1, 0.1; 1, 1], [0, 0.1, 0.1,
0.05; 0.9, 0.9])
C2 ([0.467, 0.567, 0.567, 0.667; 1, 1],
[0.517, 0.567, 0.567, 0.617; 0.9,
0.9])
C3 ([0.067, 0.167, 0.167, 0.2; 1, 1],
[0.083, 0.167, 0.167, 0.15; 0.9, 0.9])
C4 ([0.067, 0.167, 0.167, 0.2; 1, 1],
[0.083, 0.167, 0.167, 0.15; 0.9, 0.9])
([0.467, 0.567, 0.567, 0.667; 1, 1],
[0.517, 0.567, 0.567, 0.617; 0.9,
0.9])
([0, 0.1, 0.1, 0.1; 1, 1], [0, 0.1, 0.1,
0.05; 0.9, 0.9])
([0.267, 0.367, 0.367, 0.467; 1, 1],
[0.317, 0.367, 0.367, 0.417; 0.9,
0.9])
([0.2, 0.3, 0.3, 0.4; 1, 1], [0.25, 0.3,
0.3, 0.35; 0.9, 0.9])
([0.267, 0.367, 0.367, 0.467; 1, 1],
[0.317, 0.367, 0.367, 0.417; 0.9,
0.9])
([0.333, 0.433, 0.433, 0.533; 1, 1],
[0.383, 0.433, 0.433, 0.483; 0.9,
0.9])
([0, 0.1, 0.1, 0.1; 1, 1], [0, 0.1, 0.1,
0.05; 0.9, 0.9])
([0.133, 0.233, 0.233, 0.3; 1, 1],
[0.167, 0.233, 0.233, 0.25; 0.9, 0.9])
([0.467, 0.567, 0.567, 0.667; 1, 1],
[0.517, 0.567, 0.567, 0.617; 0.9,
0.9])
([0.467, 0.567, 0.567, 0.667; 1, 1],
[0.517, 0.567, 0.567, 0.617; 0.9,
0.9])
([0.4, 0.5, 0.5, 0.6; 1, 1], [0.45, 0.5,
0.5, 0.55; 0.9, 0.9])
([0, 0.1, 0.1, 0.1; 1, 1], [0, 0.1, 0.1,
0.05; 0.9, 0.9])
Analyzing

of the factors
relationships matrix
Table VII.
causal

Initial direct
29
relationships
 30
36,1

factors
IJOES

Table VIII.
Matrix (D) of the
Factors C1 C2 C3 C4

C1 ([0, 0.049, 0.049, 0.054; 1, 1], [0,
0.049, 0.049, 0.06; 0.9, 0.9])
C2 ([0.23, 0.279, 0.279, 0.328; 1, 1],
[0.254, 0.279, 0.279, 0.303; 0.9,
0.9])
C3 ([0.033, 0.082, 0.082, 0.098; 1, 1],
[0.041, 0.082, 0.082, 0.074; 0.9,
0.9])
C4 ([0.033, 0.082, 0.082, 0.098; 1, 1],
[0.041, 0.082, 0.082, 0.074; 0.9,
0.9])
([0.23, 0.279, 0.279, 0.328; 1, 1],
[0.254, 0.279, 0.279, 0.303; 0.9,
0.9])
([0, 0.049, 0.049, 0.049; 1, 1], [0,
0.049, 0.049, 0.025; 0.9, 0.9])
([0.131, 0.18, 0.18, 0.23; 1, 1],
[0.156, 0.18, 0.18, 0.205; 0.9, 0.9])
([0.098, 0.148, 0.148, 0.197; 1, 1],
[0.123, 0.148, 0.148, 0.172; 0.9,
0.9])
([0.131, 0.18, 0.18, 0.23; 1, 1],
[0.156, 0.18, 0.18, 0.205; 0.9, 0.9])
([0.164, 0.213, 0.213, 0.262; 1, 1],
[0.189, 0.213, 0.213, 0.238; 0.9,
0.9])
([0, 0.049, 0.049, 0.049; 1, 1], [0,
0.049, 0.049, 0.025; 0.9, 0.9])
([0.066, 0.115, 0.115, 0.148; 1, 1],
[0.082, 0.115, 0.115, 0.123; 0.9,
0.9])
([0.23, 0.279, 0.279, 0.328; 1, 1],
[0.254, 0.279, 0.279, 0.303; 0.9,
0.9])
([0.23, 0.279, 0.279, 0.328; 1, 1],
[0.254, 0.279, 0.279, 0.303; 0.9,
0.9])
([0.197, 0.246, 0.246, 0.295; 1, 1],
[0.221, 0.246, 0.246, 0.27; 0.9, 0.9])
([0, 0.049, 0.049, 0.049; 1, 1], [0,
0.049, 0.049, 0.025; 0.9, 0.9])
investment alternatives for interested individuals. This feature provides cash reserves for Analyzing
financing units of production. causal
How to select stocks on the stock exchange is one of the important issues for investors in
such markets. If the investor makes a logical decision in choosing the stock, he can achieve
relationships
more than the average market yield. In markets such as Tehran Stock Exchange, which does
not have high performance, it is necessary for investors to be more careful because there is
no good balance between the true stock value and its price. Therefore, it is important for
investors to have access to ways to help them in choosing their stock. 31
Considering the fact that the optimal allocation of resources and market efficiencies
requires tools and expertise, the present study has sought to identify weight and determine
the causal relationships of effective factors on the decision of individual investors to
purchase shares of Tehran Stock Exchange. Therefore, in present study, factors influencing
investors’ decision-making were identified in four financial, economic, political and
psychological parameters of the market based on the research background, review of
literature and opinions of investment experts as it has been shown in diagram of Figure 1.
Then, the data gathered from questionnaires were analyzed using combined approach of
type-2 fuzzy AHP and type-2 Fuzzy DEMATEL methods.
The purpose of the present study was to identify the most important and influential
factors affecting individual investment in Tehran Stock Exchange. For this purpose, the
casual diagram was drawn to identify the most significant and influential indicators and
sub-indicators. In the casual diagram, axis X includes (D þ R), which its amount is always
positive and indicates the weight or importance of values and axis Y includes (D  R), which
indicate the certainty of indicator’s effect if its amount is positive; otherwise the effect of the
indicator is uncertain. The matter is called effectiveness ratio in the system. Based on this
approach, the factors affecting individual investment in Tehran Stock Exchange can be
divided into two categories of cause and effect.
After data analysis in Table XI and diagram of Figure 2, the financial and economic
indicators were identified as the most important dimensions because of their high value of
(D þ R). They were also identified as effective factors because of their positive value of (D 
R). Two political and psychological indicators of the market were identified as affected
indicators because of their negative (D  R). As a result, the financial dimension was
identified as the most important dimension. The economic dimension was identified as the
second important dimension and then the political and psychological dimensions of the
market were less important. The financial dimension was identified as the most effective
dimension, after which the economic dimension was highly influential. The results are in
consistent with the results obtained from the studies of (Luminita, 2014; Chong and Lai,
2011; Al-Ajmi, 2009; Nagy and Obenberger, 1994).
The result indicated that investors use from refer to financial indicators such as financial
ratios, dividend per share (DPS), capital increase, risk and return ratio, EPS Price-to-profit
(P/E), belief in future price and return performance, and the review of the power of equity
liquidity in their fundamental and technical analyzes (Naser and Nuseibeh, 2003; Wong and

Factors C1 C2 C3 C4

C1 0 0.23 0.131 0.23

C2 0.23 0 0.164 0.23
C3 0.033 0.131 0 0.197 Table IX.
C4 0.033 0.098 0.066 0 The matrix Za
 32
36,1
IJOES

The total
Table X.

of the factors
relationships matrix
Factors C1 C2 C3 C4

C1 ([0.092, 0.32, 0.32, 0.601; 1, 1],
[0.128, 0.32, 0.32, 0.33; 0.9, 0.9])
C2 ([0.28, 0.513, 0.513, 0.831; 1, 1],
[0.334, 0.513, 0.513, 0.555; 0.9,
0.9])
C3 ([0.086, 0.27, 0.27, 0.495; 1, 1],
[0.12, 0.27, 0.27, 0.282; 0.9, 0.9])
C4 ([0.069, 0.226, 0.226, 0.414; 1, 1],
[0.097, 0.226, 0.226, 0.234; 0.9,
0.9])
([0.315, 0.579, 0.579, 0.994; 1, 1],
[0.386, 0.579, 0.579, 0.662; 0.9,
0.9])
([0.133, 0.403, 0.403, 0.794; 1, 1],
[0.19, 0.403, 0.403, 0.456; 0.9, 0.9])
([0.185, 0.398, 0.398, 0.718; 1, 1],
[0.241, 0.398, 0.398, 0.457; 0.9,
0.9])
([0.134, 0.316, 0.316, 0.585; 1, 1],
[0.182, 0.316, 0.316, 0.365; 0.9,
0.9])
([0.219, 0.462, 0.462, 0.84; 1, 1],
[0.285, 0.462, 0.462, 0.9; 0.9,
0.366])
([0.247, 0.495, 0.495, 0.878; 1, 1],
[0.314, 0.495, 0.495, 0.9; 0.9,
0.373])
([0.059, 0.255, 0.255, 0.507; 1, 1],
[0.091, 0.255, 0.255, 0.9; 0.9,
0.271])
([0.101, 0.268, 0.268, 0.502; 1, 1],
[0.14, 0.268, 0.268, 0.9; 0.9, 0.066])
([0.366, 0.676, 0.676, 1.155; 1, 1],
[0.448, 0.676, 0.676, 0.768; 0.9,
0.9])
([0.373, 0.69, 0.69, 1.178; 1, 1],
[0.457, 0.69, 0.69, 0.783; 0.9, 0.9])
([0.271, 0.52, 0.52, 0.886; 1, 1],
[0.333, 0.52, 0.52, 0.582; 0.9, 0.9])
([0.066, 0.28, 0.28, 0.552; 1, 1],
[0.102, 0.28, 0.28, 0.295; 0.9, 0.9])
 E(W) NEW E(W)
Factors DþR DR DþR DR NEWD þ R NEWD  R

C1 ([1.519, 3.365, 3.365, 5.931; 1, 1], ([0.464, 0.708, 0.708, 1.248; 1, 1], 3.23 0.73 2.093 0.475
[1.926, 3.365, 3.365, 3.699; 0.9, 0.9]) [0.569, 0.708, 0.708, 0.897; 0.9, 0.9])
C2 ([1.802, 3.797, 3.797, 6.773; 1, 1], ([0.266, 0.406, 0.406, 0.591; 1, 1], 3.70 0.39 0.993 0.105
[2.293, 3.797, 3.797, 4.303; 0.9, 0.9]) [0.295, 0.406, 0.406, 0.425; 0.9, 0.9])
C3 ([1.228, 2.922, 2.922, 5.332; 1, 1], ([0.025, 0.038, 0.038, 0.123; 1, 1], 2.82 0.05 0.308 0.006
[1.616, 2.922, 2.922, 3.268; 0.9, 0.9]) [0.044, 0.038, 0.038, 0.088; 0.9, 0.9])
C4 ([1.447, 3.255, 3.255, 5.826; 1, 1], ([0.706, 1.076, 1.076, 1.717; 1, 1], 3.14 1.07 0.189 0.064
[1.86, 3.255, 3.255, 3.623; 0.9, 0.9]) [0.819, 1.076, 1.076, 1.234; 0.9, 0.9])
Analyzing

shares in Tehran
D + R and D − R of

Stock Exchange
the factors effect on
causal

33
relationships

investors to purchase
of individual
the decision-making
Table XI.
 34
36,1
IJOES

Table XII.

on the decision-

Stock Exchange
shares in Tehran
D + R and D − R of
the sub-factors effect

making of individual
investors to purchase
E(W) NEW E(W)
Factors Sub-factors DþR DR D þR DR NEWD þ R NEWD  R

C1 C11 ([1.876, 3.214, 3.214, 5.256; 1, 1], ([0.829, 1.115, 1.115, 1.591; 1, 1], 3.19 1.11 1.284 0.4466
[2.327, 3.214, 3.214, 3.849; 0.9, 0.9]) [0.937, 1.115, 1.115, 1.282; 0.9, 0.9])
C12 ([2.03, 3.422, 3.422, 5.582; 1, 1], ([0.012, 0.016, 0.016, 0.005; 1, 1], 3.40 0.01 0.116 0.0004
[2.51, 3.422, 3.422, 4.111; 0.9, 0.9]) [0.008, 0.016, 0.016, 0.004; 0.9, 0.9])
C13 ([1.518, 2.733, 2.733, 4.599; 1, 1], ([0.106, 0.142, 0.142, 0.176; 1, 1], 2.72 0.13 0.184 0.0091
[1.932, 2.733, 2.733, 3.319; 0.9, 0.9]) [0.112, 0.142, 0.142, 0.142; 0.9, 0.9])
C14 ([1.955, 3.32, 3.32, 5.443; 1, 1], ([0.355, 0.478, 0.478, 0.677; 1, 1], 3.31 0.47 0.408 0.0586
[2.427, 3.32, 3.32, 3.999; 0.9, 0.9]) [0.4, 0.478, 0.478, 0.546; 0.9, 0.9])
C15 ([2.135, 3.563, 3.563, 5.779; 1, 1], ([0.018, 0.024, 0.024, 0.011; 1, 1], 3.54 0.02 0.585 0.0029
[2.628, 3.563, 3.563, 4.27; 0.9, 0.9]) [0.013, 0.024, 0.024, 0.009; 0.9, 0.9])
C16 ([2.103, 3.519, 3.519, 5.736; 1, 1], ([0.26, 0.35, 0.35, 0.482; 1, 1], 3.51 0.34 0.854 0.0838
[2.597, 3.519, 3.519, 4.235; 0.9, 0.9]) [0.289, 0.35, 0.35, 0.388; 0.9, 0.9])
C17 ([1.297, 2.435, 2.435, 4.09; 1, 1], ([0.586, 0.788, 0.788, 1.238; 1, 1], 2.40 0.81 0.048 0.0162
[1.656, 2.435, 2.435, 2.908; 0.9, 0.9]) [0.696, 0.788, 0.788, 0.998; 0.9, 0.9])
C18 ([1.364, 2.525, 2.525, 4.314; 1, 1], ([0.013, 0.017, 0.017, 0.036; 1, 1], 2.52 0.00 0.123 0.0001
[1.76, 2.525, 2.525, 3.089; 0.9, 0.9]) [0.004, 0.017, 0.017, 0.029; 0.9, 0.9])
C2 C21 ([2.159, 5.67, 5.67, 16.115; 1, 1], ([0.311, 0.573, 0.573, 1.294; 1, 1], 6.22 0.60 0.545 0.052
[2.92, 5.67, 5.67, 7.048; 0.9, 0.9]) [0.36, 0.573, 0.573, 0.647; 0.9, 0.9])
C22 ([1.951, 5.285, 5.285, 15.423; 1, 1], ([0.191, 0.352, 0.352, 0.917; 1, 1], 5.86 0.39 0.27 0.018
[2.703, 5.285, 5.285, 6.702; 0.9, 0.9]) [0.238, 0.352, 0.352, 0.458; 0.9, 0.9])
C23 ([2.16, 5.671, 5.671, 16.125; 1, 1], ([0.315, 0.581, 0.581, 1.311; 1, 1], 6.23 0.61 3.304 0.322
[2.922, 5.671, 5.671, 7.053; 0.9, 0.9]) [0.364, 0.581, 0.581, 0.655; 0.9, 0.9])
C24 ([2.206, 5.756, 5.756, 16.488; 1, 1], ([0.195, 0.36, 0.36, 0.934; 1, 1], 6.35 0.40 2.284 0.144
[2.999, 5.756, 5.756, 7.234; 0.9, 0.9]) [0.243, 0.36, 0.36, 0.466; 0.9, 0.9])
C3 C31 ([1.411, 4.245, 4.245, 9.629; 1, 1], ([0.147, 0.269, 0.269, 0.562; 1, 1], 4.21 0.28 3.191 0.211
[1.922, 4.245, 4.245, 4.594; 0.9, 0.9]) [0.18, 0.269, 0.269, 0.319; 0.9, 0.9])
C32 ([1.188, 3.837, 3.837, 8.579; 1, 1], ([0.172, 0.316, 0.316, 0.687; 1, 1], 3.75 0.33 0.281 0.025
[1.616, 3.837, 3.837, 3.999; 0.9, 0.9]) [0.216, 0.316, 0.316, 0.39; 0.9, 0.9])
(continued)
 E(W) NEW E(W)
Factors Sub-factors DþR DR D þR DR NEWD þ R NEWD  R

C33 ([1.386, 4.199, 4.199, 9.391; 1, 1], ([0.319, 0.585, 0.585, 1.249; 1, 1], 4.13 0.61 0.682 0.101
[1.867, 4.199, 4.199, 4.459; 0.9, 0.9]) [0.396, 0.585, 0.585, 0.708; 0.9, 0.9])
C4 C41 ([1.647, 3.189, 3.189, 5.408; 1, 1], ([0.349, 0.496, 0.496, 0.814; 1, 1], 3.12 0.51 0.116 0.019
[2.072, 3.189, 3.189, 3.685; 0.9, 0.9]) [0.419, 0.496, 0.496, 0.625; 0.9, 0.9])
C42 ([1.824, 3.439, 3.439, 5.796; 1, 1], ([0.646, 0.919, 0.919, 1.366; 1, 1], 3.37 0.91 0.455 0.123
[2.277, 3.439, 3.439, 3.983; 0.9, 0.9]) [0.736, 0.919, 0.919, 1.048; 0.9, 0.9])
C43 ([1.537, 3.031, 3.031, 5.145; 1, 1], ([0.671, 0.954, 0.954, 1.498; 1, 1], 2.95 0.97 0.221 0.072
[1.938, 3.031, 3.031, 3.483; 0.9, 0.9]) [0.786, 0.954, 0.954, 1.149; 0.9, 0.9])
C44 ([1.707, 3.274, 3.274, 5.648; 1, 1], ([0.069, 0.098, 0.098, 0.139; 1, 1], 3.23 0.10 0.923 0.027
[2.172, 3.274, 3.274, 3.869; 0.9, 0.9]) [0.077, 0.098, 0.098, 0.106; 0.9, 0.9])
C45 ([1.702, 3.266, 3.266, 5.594; 1, 1], ([0.255, 0.363, 0.363, 0.544; 1, 1], 3.21 0.36 1.682 0.189
[2.154, 3.266, 3.266, 3.827; 0.9, 0.9]) [0.292, 0.363, 0.363, 0.417; 0.9, 0.9])
Analyzing
causal

Table XII.
35
relationships
IJOES 0.5
C1
36,1 0.4

0.3

D-R
0.2
36
0.1
C2
C3
0
Figure 2. 0.1 0.6 1.1 1.6 2.1
Diagram of the C4
–0.1
factors
D+R

0.5
C11
0.4
C23
0.3

0.2
C42 C33
D-R

0.1 C16
C41
C18
0 C22 C15
C44 C12
C17 C430.5 C21
0 C13 1 1.5 2 2.5 3
–0.1
C32 C14
Figure 3. –0.2 C45 C24
C31
Diagram of the sub-
–0.3
factors
D+R

Cheung, 1999). The economic dimension has also been considered in the next place after the
financial dimension with a significant difference. Finally, least attention has been paid to the
psychological dimension of the market. This viewpoint is consistent with the studies of (Al-
Tamimi, 2006; Carr et al., 2010; Fazzari et al., 1988; Liu and Pang, 2009; Nagy and
Obenberger, 1994; Potter, 1971). The results indicated that there is relatively standard level
of financial literacy in Iran and investors can contribute to the stock market using the right
investment. The culture of financial literacy in Iran is at an early stage in Iran and recently,
institutions such as the Tehran Stock Exchange have created a space to increase financial
literacy for investors in these institutions.
In Iran, the acceptance of politics and the economic and political environment is of special
importance. In each country, no tricks or incentives would be successful in attracting capital
if the amount of risk exceeds an acceptable level from the investors’ viewpoint. Therefore,
economic and political structure of a country has a determinant effect on attracting or
reducing investment attraction.
After data analysis in Table XII and diagram of Figure 3, the sub-indicators of
information on the average inflation rate and its flow, the pursuit of political news and its
effect on the stock market, international economic developments’ effect on Tehran Stock
Exchange, the view of brokers and investment consulting firms and financial ratios were
identified, respectively, as the most important sub-indicators because of their high value of
(D þ R). Other sub-indicators were less important with a far different. The sub-indicators of Analyzing
dividing per share (DPS) and news published in newspapers and magazines were causal
of paramount importance. In addition, financial ratios, information on the average inflation relationships
rate and its flow, comments by stockholders on the future market situation were identified
as the most effective sub-indicators, respectively, because of their positive (D  R). The
pursuit of political news and its impact on the stock market, the view of brokers and
investment advisory companies were identified as the most affected sub-indicators, 37
respectively, because of their negative (D – R).
The result indicated that investors in Iran are paying special attention to economic and
political developments. Given the economic and political changes taken place in Iran over
the past decade, inflation has fluctuated significantly in the country. Investors in Iran tend
to have a steady trend in rising prices and the matter has led that investors avoid stocks
with high price fluctuations. Therefore, it is reasonable for investors to pay special attention
to the inflation rate. According to Lewellen et al. (1980), the advocates of the constant price
trend are investors and advocates of the changing price trend are traders. Investors try to
reduce the risk as much as possible. On the other side, investors in Iran do not pay much
attention to investing in the stock market because of high interest rate of banks. The
combination of high bank interest rates and high inflation rates has led to uncertainty in the
stock market.
It is not surprising that some of the sub-indicators are of little importance. The matter
indicates that investors are not very confident in financial statements, financial ratios and
the entire accounting system. Rather, they focus on criteria that are more tangible such as
the average inflation rate and its flow, political news and its impact on the stock market and
international economic developments. As a result, it is clear that investing in Tehran Stock
Exchange also has a stronger role than financial literacy.

6. Conclusion
Analyzing the opinions of experts showed that they have taken the financial market more
than economic, political, and psychological indicators in identifying the priority of
indicators. In the analysis of sub-indicators, it was identified that investors in Iran are
paying particular attention to pursuing political news and their impact on the stock market,
international economic developments influence Tehran Stock Exchange and financial ratios.
Also, investors pay particular attention to brokers and consulting firms. Individual
investors believe that brokers’ recommendations can be a good guide to buying stocks.
The present study has been carried out in Iran, and therefore, is geographically limited to
Iran. In thematic terms, it is limited to effective factors of individual investments in Tehran
Stock Exchange. The statistical population of present study was limited to investing experts
in Tehran Stock Exchange. The difference in financial, economic, social and political
conditions of individuals was another limitation of present study. Given the uncertainty in
the market status, using multi-criteria decision-making techniques in financial analysis can
help decision-makers to make better decisions. In addition, it would be possible to take into
account many variables that do not have a mathematical aspect but are important in
decision-making and lead to increased decision-making satisfaction. It is recommended to
use the methodology of present study to analysis further variables. Also, the indicators
identified in present study can be ranked by fuzzy TOPSIS approach. Among the strengths
of present study, it can be referred to use of fuzzy logic instead of the definitive logic that
brings the results closer to reality.
IJOES Note
36,1 1 Risk-adjusted return refines an investment’s return by measuring how much risk is involved in
producing that return, which is generally expressed as a number or rating. Risk-adjusted returns
are applied to individual securities, investment funds and portfolios.

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Corresponding author
Hossein Sayyadi Tooranloo can be contacted at: h.sayyadi@vru.ac.ir

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