BEHAVIOURAL FINANCE AND ITS BIASES: A STUDY ON INVESTORS INVESTING THROUGH STOCK TRADING PLATFORMS

Abstract

Finance has been a vital aspect of everyone’s life, but everyone tends to behave differently while managing finance. Some work for money, and very few put their money into work. Traditional finance has been inefficient in concluding why behaviour with money and finance differs among individuals. Behavioural finance has been considered sound in defining the underlying factors that result in unpredictable financial decisions. This study tried to explain the same using four behavioural biases: overconfidence bias, recency bias, anchoring bias, and herding bias. The study also tried to explain the role of stock trading platforms in encouraging investment habits among individual investors. A questionnaire was developed using Likert scaling techniques to find who among males and females is more sceptical of these four biases. Data has been analysed using Excel data analysis tools and techniques. After analysing the collected data, it can be summarised that out of four biases, only herding bias has the potential to impact the investment decisions of individual investors and that too is more prominent in male than female individual investors.