The Role Of Behavioural Finance In Investment Decision-Making: A Study On Cognitive Biases And Market Trends

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Quantitative survey analyzes cognitive biases affecting investment decisions, highlighting implications for market trends.

Overconfidence emerged as the strongest predictor of investment performance, enhancing returns under specific conditions.
Loss aversion significantly negatively impacted investment choices, leading to overly cautious behavior in retail investors.
Herding showed a minor positive influence on performance, suggesting trend-following may yield short-term gains.
Institutional investors demonstrated slightly better performance than retail investors due to structured decision-making and resources.

Vijayakumar et al. (2025) studied this question.

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