1.
Gauri Chauhan
– Assistant Professor, Shri Vaishnav Vidyapeeth Vishwavidyalaya, Indore, Madhya Pradesh, India.
2.
Deepa Potdar
– Assistant Professor, Shri Vaishnav Vidyapeeth Vishwavidyalaya, Indore, Madhya Pradesh, India.
3.
Aradhana Bhopte
– Assistant Professor, Shri Vaishnav Institute of Management and Science, Indore, Madhya Pradesh, India.
Abstract
The purpose of this research is to explore the emotional bias factors affecting investor’s behaviour. The present study is Exploratory in nature. A total of 24 items are used to fulfil the objective of the study. Some of the items are from previous research while some new items have been added to the identified six emotional biases of individual investors are modified and used in this study. Overconfidence bias, Status Quo bias, Loss aversion bias, Negativity bias, self-control Bias, and Regret Aversion Bias these six emotional biases are considered in the present study. After checking the reliability of the data Exploratory Factor Analysis was applied. Total 7 Factors emerged as a factor of emotional biases impacting investment decisions. Namely Overconfidence, Negativity, Status Quo, Loss Aversion, Self-control, Regret Aversion and Endowment. It was concluded that the factor overconfidence emerged as the strongest predictor for Emotional Biases. The results of this study demonstrated that investors’ emotions had a greater influence on their investment decisions than their cognitive and mathematical skills alone.
Keywords Behavioural Biases, Behavioural Finance, Emotional Biases, Investors, Investment Decisions
