Behavioral Finance and Impact on Investor Decision Making

International Journal of Emerging Research in Science, Engineering, and Management
Vol. 2, SI1 (2026), pp. 132–136
Proceedings of Selected Papers from the
National Conference on Emerging Trends in Commerce and Management
NCETCM-2K26
2026-03-30 to 2026-03-31
Vijayawada, Andhra Pradesh, India
Organized by Andhra Loyola College, Vijayawada, India
eISSN: 3107-9075

This work is licensed under a Creative Commons Attribution 4.0 International License .

Behavioral Finance and Impact on Investor Decision Making

V. Supriya, M D. Jasmine, L. Sunny Abilash, S. Hari Krishna

Department of MBA, Andhra Loyola College, Vijayawada, Andhra Pradesh, India

Abstract

This study investigates the intersection of psychology and finance by analysing how cognitive biases—specifically overconfidence, herding, anchoring, and loss aversion—influence individual investment decisions. Utilizing a quantitative approach, primary data were gathered from a convenience sample of investors via structured questionnaires. Hypotheses were tested using a robust suite of inferential statistical techniques, including multiple regression, Pearson correlation, Chi-square tests, and ANOVA. The empirical results reveal a nuanced relationship between demographics and decision-making: while gender exerted a statistically significant influence on the investment process, age, occupation, and educational attainment did not. Furthermore, the findings indicate that behavioural biases and investor awareness levels are statistically insignificant predictors of investment choices within this sample. However, a significant positive correlation was identified between investor psychology and the manifestation of behavioural biases, suggesting that internal psychological frameworks are more critical drivers of bias than external demographic profiles or general awareness. Correlation analysis further demonstrated a negative relationship between gender and occupation, contrasted by a positive correlation between age and education. These findings challenge traditional assumptions regarding the impact of bias on rational decision-making, highlighting the complexity of psychological triggers in financial environments.

Keywords: Behavioural Finance, Overconfidence Bias, Herd Behaviour, Loss Aversion, Anchoring.

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DOI: 10.66710/ijersem.v2si1.17

Open Access • Peer Reviewed Article

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This article is part of Volume 2, Special Issue 1 (May 2026)

2026-05-17