Authors: Mr. Surya C L, Dr.S. Krishnakumar, Dr. S. Parthiban
Abstract: Conventional finance theories posit that investors act rationally on the basis of the available information. However, research evidence shows that the psychological elements have a systematic effect on the investment decision-making process and lead to market anomalies. This study explores the influence of behavioural biases like overconfidence, herding, loss aversion, and anchoring on individual investment decision in equity markets. The methodology proposed in this study is a quantitative approach utilizing structural equation modelling (SEM). Survey data collected from 380 retail investors will be used for the analysis. It will be found out that the behavioral biases affect the investment decisions, directly and indirectly through risk perception, and financial literacy mitigates the impact of these biases on investment decisions.
DOI: http://doi.org/10.5281/zenodo.21675563
