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2025
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| Online Access: | https://doi.org/10.5281/zenodo.15856245 |
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| author | Sanjay P S |
| author_facet | Sanjay P S |
| contents | <p>Behavioral finance applies psychological characteristics of individuals to the decision-making process<br>which involves financial resources. The cognitive errors that investors typically exhibit, in conjunction<br>with other factors, impede their ability to make sound economic decisions. This study aims to examine<br>equity market investors' decision-making processes in relation to six critical cognitive biases: anchoring<br>bias, overconfidence bias, representativeness bias, loss aversion, herding bias, and availability bias. Using<br>a structured questionnaire, a sample of 81 respondents was surveyed. In the absence of sophisticated<br>financial products in the country, the majority of the research participants exhibited the trend and suffered<br>from overconfidence bias. The participants who had received more education were more overconfident.<br>You see this in young investors and less so in old investors. The study also found that investors use mental<br>shortcuts which lead to systematic irrational decisions. By investigating the determinants of investors, this<br>study furthers the body of knowledge in behavioral finance, thereby improving the capacity of financial<br>consultants, authorities, and investors to reduce errors caused by biases. By addressing these biases,<br>investors can make more informed and rational investment decisions, thereby achieving optimal financial<br>outcomes in the equity market.</p> |
| format | Recurso digital |
| id | zenodo_https___doi_org_10_5281_zenodo_15856245 |
| institution | Zenodo |
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| publishDate | 2025 |
| publisher | Zenodo |
| record_format | zenodo |
| spellingShingle | Study on The Influence of Cognitive Biases on Retail Investor Decision-Making in the Equity Market Sanjay P S <p>Behavioral finance applies psychological characteristics of individuals to the decision-making process<br>which involves financial resources. The cognitive errors that investors typically exhibit, in conjunction<br>with other factors, impede their ability to make sound economic decisions. This study aims to examine<br>equity market investors' decision-making processes in relation to six critical cognitive biases: anchoring<br>bias, overconfidence bias, representativeness bias, loss aversion, herding bias, and availability bias. Using<br>a structured questionnaire, a sample of 81 respondents was surveyed. In the absence of sophisticated<br>financial products in the country, the majority of the research participants exhibited the trend and suffered<br>from overconfidence bias. The participants who had received more education were more overconfident.<br>You see this in young investors and less so in old investors. The study also found that investors use mental<br>shortcuts which lead to systematic irrational decisions. By investigating the determinants of investors, this<br>study furthers the body of knowledge in behavioral finance, thereby improving the capacity of financial<br>consultants, authorities, and investors to reduce errors caused by biases. By addressing these biases,<br>investors can make more informed and rational investment decisions, thereby achieving optimal financial<br>outcomes in the equity market.</p> |
| title | Study on The Influence of Cognitive Biases on Retail Investor Decision-Making in the Equity Market |
| url | https://doi.org/10.5281/zenodo.15856245 |