Behavior Factors Influence Decision-Making Process

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Introduction One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute. William feather This research is basically designed to prove the traditional finance theories wrong according to which human being always make rational decisions. According to Nofsinger (2001) the base of traditional finance is evolved from the assumption that human being always make rational decisions and they are normally considered to be as unbiased in their decision making process. They are considered as unbiased because normally their decision making process is based on two assumptions that: A: investors have full information about the market. B: his decision making is affected by that information and he take profit maximizing decisions.…show more content…
This study is based on primary data that is collected through structured questionnaires from 36 individual investors based out in Mysore city. Researcher identifies 8 different factors that influence decision making process. The study concludes that behavioral biases influence decision making process. Chandra (2008) studies the impact of behavioral factors and investment psychology on their investments. The research is based on secondary data. Researches find that unlike the theories suggests, individuals are not always rational. Their decision making process is influenced by behavioral factors. Maheran, Muhammed and Ismail (2008) aimed to investigate the relationship between investment decision making of an investor and their rationality in investing in the Malaysian capital market. The findings of the study indicate that the economic condition influence investor decision-making behavior. The study concluded that Malaysian investors are partially rational in their decision-making. Other literatures related to particular biases are: Behavioral

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