A STUDY ON BEHAVIORAL FINANCE IN INVESTMENT DECISIONS OF INVESTORS IN ODISHA
Author(s):
Dr. Sanjukta Mishra, NA
Keywords:
behavioral finance; behavioral anomalies; traditional finance theories; rational decision; market efficiency; behavioral biases
Abstract
The present study aims to develop into the field of behavioral finance and examine the role of psychological factors in shaping individuals' financial decision-making processes. India, during early 1990 has opened up itself to the world; the liberalization, privatization and globalization have brought impressive GDP Growth. The major contributor to this was the investors. Behavioral finance is one of the important topics for us to know about the mind sets of the people about how they think of various things when they invest in various investment avenues. Traditional finance theories assume rationality and efficiency in the financial markets; however, empirical evidence suggests that human behavior often deviates from these assumptions, leading to irrational and suboptimal financial decisions. Behavioral finance seeks to understand and explain these deviations by integrating insights from psychology into financial theory. Through this research we came to know about the mentality of the people while they invest in various investment avenues. In this paper various psychological biases, heuristics, and emotions that influence investment choices, risk perception, asset pricing, and market anomalies. By shedding light on the intricate relationship between psychology and finance, this study seeks to contribute to a deeper understanding of how behavioral factors affect investment outcomes and market dynamics. The primary objective was to know effects of behavioral financing on investors and to study the impact and relevance of behavioral financing in investment decision of investors. This study is an exploratory in nature used the primary data collected from five different clusters in Odisha namely; Cuttack, Bhubaneswar, Berhampur, Rourkela and Sambalpur through a structured questionnaire from 210 individual investors.
Article Details
Unique Paper ID: 161478

Publication Volume & Issue: Volume 10, Issue 4

Page(s): 529 - 535
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