BEHAVIORAL BIASES AND THEIR IMPACT ON INDIVIDUAL INVESTMENT DECISIONS


Lalitha Sree.S, Sai Nanditha.K, Devi Prasanna.M, Udaya Lakshmi.C, Dr. B. Raghava Reddy
Dept. of Commerce and Management, Mohan Babu University, Sree Sainath Nagar, Tirupati–517102, Andhra Pradesh
Abstract
Objective: This study investigates the impact of key behavioral biases on investors' stock trading decisions in South India, a region characterized by rapid economic growth, burgeoning stock market participation, and diverse investor demographics. While traditional financial theories such as the Efficient Market Hypothesis and Modern Portfolio Theory have long dominated explanations of investment behavior, they often overlook the psychological underpinnings that drive real-world decisions. Contemporary research increasingly highlights behavioral biases as critical influencers, yet these have received limited attention in prior Indian studies.This study bridges that gap by examining biases including overconfidence, representativeness, herding, anchoring, loss aversion, and confirmation bias, aiming to reveal their role in shaping trading patterns among South Indian investors. Methods: Primary data were collected via a structured questionnaire from investors across South Indian States (Tamil Nadu, Karnataka, Andhra Pradesh, Kerala, and Telangana). These states were selected for their high stock market penetration, techsavvy populations, and active trading hubs like Chennai, Bengaluru, and Hyderabad. Respondents included demographically diverse participants The data underwent rigorous analysis
Keywords: Behavioral biases, stock trading decisions, South India, structural equation modeling, investor psychology
Journal Name :
EPRA International Journal of Economics, Business and Management Studies (EBMS)

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Published on : 2026-04-18

Vol : 13
Issue : 4
Month : April
Year : 2026
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