School of Management, IMS Unison University, Dehradun, Uttarakhand, India.
Abstract
Cognitive dissonance bias (CDB), first conceptualised by Festinger (1957), refers to the psychological discomfort that arises from inconsistencies between beliefs, attitudes, and outcomes. Although widely recognised in social and consumer psychology, its manifestation in financial decision-making remains underexplored. This study presents a hybrid bibliometric and thematic review of 422 peer-reviewed articles published in Scopus-indexed ABDC A*/A journals, aiming to synthesise the psychological underpinnings of CDB in investment contexts. The review identifies three major research gaps: the limited integration of cognitive and affective mechanisms explaining investor dissonance, weak theoretical linkages between marketing’s post-purchase dissonance and financial regret, and the absence of empirically validated interventions to mitigate CDB. Thematic clustering reveals five dominant streams of inquiry: social influence and post-investment dissonance, emotional and market sentiments, cultural variations, emerging market dynamics, and socio-economic moderators. Although recent studies propose behavioural tools such as decision aids, regulatory nudges, and transparency mechanisms, these frameworks largely remain conceptual. Future directions include neuroscientific investigations (fMRI/EEG), artificial intelligence (AI)-based bias detection, and context-specific modelling in sustainable and algorithmic investing. By integrating psychological theory with behavioural finance (BF), this study contributes to a more comprehensive and psychologically grounded understanding of investor decision-making.
Keywords: Behavioural Bias, Investor Psychology, Cognitive Dissonance Bias, Literature Review, Bibliometric Review, Thematic Analysis
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