Investigation on Psychological Factors Influencing Investment Decision Making

Abstract

Investment decision-making is a critical component of economic activity in finance, impacting resource allocation, market dynamics, and individual and organizational financial consequences. Although conventional finance theories have always placed an emphasis on investor behavior that is efficient and rational, the emerging discipline of behavioral finance has provided insight into the various ways that human psychology affects financial decisions. This dissertation delves at the psychological aspects that impact investors' decision-making when making investments. In light of the ever-changing preferences of investors and the ever-more complex financial markets, it has become imperative to investigate the psychological foundations of investment behavior. This study aims to clarify the complex interactions among cognitive biases, affective reactions, and decision-making processes