Impact of behavioural biases in portfolio investment decision making process

Sukanya, R. and Thimmarayappa, R. (2015) Impact of behavioural biases in portfolio investment decision making process. International Journal of Commerce, Business and Management, 4 (4). p. 1278. ISSN 2319–2828

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Abstract

This article presents a new approach in the analysis of portfolio investment decisions, namely behavioral finance. Behavioral finance is the study of the influence of the psychological factors on financial markets evolution. Psychology, including aspirations, cognition, emotions, and culture, is at the center of behavioral finance. Behavioral finance paradigm suggests that investment decision is influenced in a large proportion by psychological and emotional factors. It has been identified that the Investors do notalways act rationally or consider all of the available information in their decisionmaking process. As a result, they regularly make errors. It turns out too that the errors they make repeat in the same way, and are, therefore, termed systematic errors. Luckily, because of this systematic character, these errors are often predictable and avoidable. The common errors that they make are also termed as behavioral biases some of them are overconfidence, anchoring, herding, regret aversion, misunderstanding, randomness, mental accounting, representativeness etc. This paper examines the role of behavioral biases on investment decision making process

Item Type: Article
Uncontrolled Keywords: Behavioral Finance and Capital Market and Cognition and Herding and Anchoring and Regret Aversion and Emotional Factors
Subjects: G Commerce > Commerce
Divisions: Department of > Commerce
Depositing User: Shrirekha N
Date Deposited: 27 Jun 2019 06:55
Last Modified: 27 Jun 2019 06:55
URI: http://eprints.uni-mysore.ac.in/id/eprint/3925

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