Different irrational mentalities interact and influence each other in investment decision-making processes. The rational use of these irrational mentalities can effectively deter and reduce the inefficient investment of the organization. Finally, OVERCONFIDENCE on managers is pervasive.Often, with the consideration of the bounded rationality theory, psychological bias of managers leads to the inefficient investment. The purpose of this study is to introduce a model for the assessment of overconfidence, risk priority, aggregate behavior and inefficient investment of managers. To achieve this goal, data are provided based on statistical data and questionnaire. Questionnaire’s taken over 320 of individuals, are gathered and the hypothesis is analyzed using PLS method. The results show that overconfidence of mangers impacts on the relation between aggregate behavior and inefficient investment. Also, overconfidence of managers affects on the relation between risk priority and inefficient investment. The findings of this study reveal that understanding illogical behaviors of managers is important in investing decision of organizations.
