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Abstract (partial) "The rapid development of Chinese economy stimulates the prosperity of its stock market. Within only 20 years, the scale of capitalization of Chinese stock market has become the second largest in the world, only after USA. However, the stock market and investors are too young that many collective irrational behaviors appear which aggravate market fluctuation. With the development of empirical studies in financial market, more and more systematically irrational behaviors have been proved, which intrigue financial researchers incorporate psychological factors into their studies to analyze market phenomena and investors’ behaviors. This paper is to study the relationship between cognitive ability and six well-known behavioral biases in the course of investors’ decision making, from the perspective of Chinese individual stock investors. Those six biases are representativeness, availability, herding, regret, anchoring, and framing effect, which systematically violate the assumption of ‘rational person’ in traditional finance studies. Those six biases are also being called cognitive errors. Meanwhile, people have different cognitive ability, which directly influences their lives. In this paper, we apply a set of scientific methods, such as deductive approach, quantitative strategy, and some critical statistical techniques, to conduct the study. Meanwhile, in order to make it clear about the knowledge of this paper, we conduct a thorough literature review, including ‘rational person’ assumption in traditional finance theories, behavioural finance viewpoints, and some important psychological knowledge. Through carefully testing and analyzing those collected data from investors, we find investors with high level of cognitive ability can effectively reduce the influence of representativeness and availability heuristics than investors in the group of low cognitive ability level. However, investors in high cognitive reflection test (CRT) group cannot perform better than investors in low CRT group when they encounter the other four cognitive errors."

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