INFLUENCE OF BEHAVIOURAL BIASES ON INVESTMENT DECISION OF INVESTORS FROM SURAT CITY

Abstract

Behavioral finance has gained importance as an essential framework for understanding investor decision-making, particularly the influence of psychological biases. Thus this study focused on examining behavioral biases that affect women investors in the Indian equity market. Despite increasing participation by women in financial markets, their investment decisions often exhibit distinct patterns shaped by cognitive and emotional factors. This study has considered and tried to measure behavioral biases such as loss aversion, mental accounting, herding, and heuristics on women’s investment choices. The study employed a descriptive research design and quantitative data from surveys where structured questionnaire was distributed among women investors across diverse age groups, education levels, and income brackets. Findings from this study highlight the significant role of loss aversion, which often leads to overly conservative investment strategies, and herding behavior, driven by reliance on social and familial networks for financial decision-making. Additionally, a notable degree of anchoring bias is observed in women’s preference for traditional investment vehicles over equities. Heuristics are a significant driver of investment decisions; the other psychological factors like loss aversion, mental accounting, and herding do not appear to have a substantial impact in this model.