Journal of Economic, Finance Research and Review (JEFRR) · Research article · Open access
Behavioral Biases and Investment Decisions: A Study on Individual Investors in the Indian Stock Market
Dr. Vilas M. Kadrolkar
9 July 2025 · Vol. 1, Issue 1, pp. 19-25
DOI: 10.65150/EP-jefrr/V1E1/2025-A003 (registration with Crossref in progress)
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What is this article about?
Traditional financial theories assume that investors are rational and make decisions based on logical evaluation of available information. However, the emergence of behavioral finance has challenged this notion, revealing that psychological factors and cognitive biases often drive investment behavior.
Article at a glance
- Published
- 9 July 2025
- Volume / issue / pages
- Vol. 1, Issue 1, pp. 19-25
- ISSN
- 3051-3650 (online) · 3051-3642 (print)
- Licence
- CC BY 4.0 — free to read and reuse with attribution
- Peer review
- Double-blind, at least two independent reviewers
- Publisher
- EP Journals Group
Abstract
Traditional financial theories assume that investors are rational and make decisions based on logical evaluation of available information. However, the emergence of behavioral finance has challenged this notion, revealing that psychological factors and cognitive biases often drive investment behavior. This study investigates the impact of behavioral biases—such as overconfidence, herd behavior, anchoring, and loss aversion—on the investment decisions of individual investors in the Indian stock market. The paper uses both primary and secondary data to analyze how these biases influence portfolio choices, risk-taking, and return expectations. Survey responses from retail investors across major cities in India provide insight into real-world investor psychology. The findings reveal that behavioral biases significantly distort rational financial decision-making, often resulting in suboptimal outcomes. Understanding these biases is essential for financial advisors, regulatory bodies, and educational institutions to design interventions that promote better investment behavior and safeguard investor interests.
Keywords: Behavioral Finance, Investment Decisions, Cognitive Bias, Indian Stock Market, Overconfidence, Herd Behavior, Anchoring, Loss Aversion, Investor Psychology
Cite this article
Dr. Vilas M. Kadrolkar (2025). Behavioral Biases and Investment Decisions: A Study on Individual Investors in the Indian Stock Market. Journal of Economic, Finance Research and Review, 1(1), 19-25. https://www.ep-journals.org/articles/behavioral-biases-and-investment-decisions-a-study-on-individual-investors-5c98b1ec
@article{Dr2025,
title = {Behavioral Biases and Investment Decisions: A Study on Individual Investors in the Indian Stock Market},
author = {Dr. Vilas M. Kadrolkar},
journal = {Journal of Economic, Finance Research and Review},
year = {2025},
volume = {1},
number = {1},
pages = {19-25},
url = {https://www.ep-journals.org/articles/behavioral-biases-and-investment-decisions-a-study-on-individual-investors-5c98b1ec}
}Questions about this article
Who wrote this article?
Dr. Vilas M. Kadrolkar.
Where and when was it published?
In Journal of Economic, Finance Research and Review, Volume 1, Issue 1, pages 19-25, published by EP Journals Group on 9 July 2025.
Is this article free to read?
Yes. It is open access under a Creative Commons Attribution 4.0 (CC BY 4.0) licence, so anyone can read, share and reuse it with attribution.
What is the DOI of this article?
10.65150/EP-jefrr/V1E1/2025-A003. Registration with Crossref is in progress.
How do I cite this article?
APA: Dr. Vilas M. Kadrolkar (2025). Behavioral Biases and Investment Decisions: A Study on Individual Investors in the Indian Stock Market. Journal of Economic, Finance Research and Review, 1(1), 19-25. https://www.ep-journals.org/articles/behavioral-biases-and-investment-decisions-a-study-on-individual-investors-5c98b1ec
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