Investigating the Impact of Behavioral Biases on Investment Decision-Making A Comparison between Behavioral Finance and Traditional Finance Perspectives write about overview of behavioral finance
Author(s):
Sanket Chaudhary, Yugal Chauhan, Sumit Tikone, Sagar Uttekar
Keywords:
behavioral biases, investment decision-making, behavioral finance, traditional finance, loss aversion, overconfidence, herding behavior, risk-adjusted returns, diversification, market timing, investor perspectives, practical implications.
Abstract
This study compares behavioral finance with traditional finance viewpoints on behavioral biases and investment decision-making. Traditional finance emphasizes rational market-based decision-making, while behavioral finance examines how psychological biases affect investment behavior. The study examines how loss aversion, overconfidence, and herding behavior affect investing decisions from both sides. A thorough literature study illuminates behavioral and traditional finance ideas and findings. Quantitative analysis of historical financial data investigates biases and investment performance, including risk-adjusted returns, diversification, and market timing. Qualitative interviews or surveys obtain investor opinions on risk and decision-making. The comparative analysis shows how biases affect investment decision-making from the two perspectives. Common biases, their effects on investing performance, and behavioral finance vs. standard finance tactics are predicted results. Investors, financial advisors, and regulators can enhance decision-making using the findings. This study adds to behavioral finance and traditional finance literature by revealing how biases affect investment outcomes.
Article Details
Unique Paper ID: 160093

Publication Volume & Issue: Volume 9, Issue 12

Page(s): 1152 - 1156
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