Observation of Behaviour in Research

 Observation of Behaviour in Research is a systematic method used to record, analyze, and interpret people’s actions and interactions in a natural or controlled setting. It is widely used in behavioral sciences, education, psychology, management, and even finance (e.g., studying investor behavior).

 Definition

Observation in research refers to the purposeful and systematic watching and recording of behavioral patterns of people, objects, or occurrences as they happen.

 Purpose

·         To capture real-time behavior without relying on self-reports

·         To understand patterns, routines, or deviations in behavior

·         To support or validate survey or experimental data

·         To generate insights where quantitative data is not sufficient

 Types of Observation

Type

Description

Example

Structured

Predetermined checklist of behaviors to observe

Observing students using finance lab software

Unstructured

Open-ended, exploratory observation

Watching investor behavior at a stock trading simulation

Participant

Researcher becomes part of the group

Joining a finance club to observe peer influence

Non-participant

Researcher observes without direct involvement

Sitting in a classroom to watch team dynamics

Naturalistic

Conducted in a natural environment

Observing customer behavior in a bank

Controlled

Conducted in a lab or experimental setting

Watching how participants react to different financial news in an experiment

 Steps in Behavioral Observation

1.      Define the research question (e.g., How do students interact in group-based finance tasks?)

2.      Select the type of observation (structured vs. unstructured, etc.)

3.      Develop an observation schedule or checklist (if structured)

4.      Conduct pilot observations to test reliability

5.      Record behavior (note-taking, video, coding sheets)

6.      Analyze data (quantify, categorize, or describe behaviors)

7.      Interpret findings in context of research objectives

 Sample Observation Checklist (Finance Class Project)

Behavior Observed

Frequency

Notes

Participates in financial discussion

3

Mostly contributed on budgeting

Shares data sources or research

2

Provided Nifty 50 stock reports

Helps team members understand concept

4

Explained CAPM formula

Dominates conversation

1

Interrupted peers occasionally

Withdrawn/Disengaged

0

Actively involved throughout

 Advantages

·         Captures actual behavior, not just opinions

·         Useful in exploratory and qualitative research

·         Provides contextual insights into group dynamics

 Limitations

·         Observer bias can affect interpretation

·         Hawthorne effect: people may change behavior when being watched

·         Ethical concerns if consent is not taken

·         Time-consuming and sometimes hard to replicate

 Example in Finance Research

Research Topic: "Observing Investor Behavior during Market Volatility Using a Trading Simulation Lab"
Observation: How frequently do participants buy/sell, check news updates, or follow peer actions when markets crash?

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