Document Type

Article

Publication Date

5-9-2022

Abstract

Purpose: The primary purpose of the study was to examine the roles of heuristic techniques and cognitive biases in Investment decision making and suggest directions for future research. Design/Methodology/Approach: The study adopted the literature review method to solicit an understanding of the heuristics and biases central to behavioural finance and influence investment decision-making. Findings: The paper provides conceptual insights into the influence of heuristic techniques and cognitive biases in investment decision-making. Results from the conceptual analysis show that in recent times, investors in their bid to minimise losses and maximize gains employ a range of heuristics which often lead to systematic errors in judgment. Practical Implications: The paper encourages investors to prioritise financial literacy as a prerequisite to making investment decisions in the capital market and minimise the overreliance on heuristic techniques which often lead to biases. Originality/Value: The current study is the first to focus on the influence of both heuristic techniques and cognitive biases in investment decision-making together with suggested future research directions. This article enhances understanding of the behavioural finance approach to investment decision-making.

Journal Title

International Journal of Academic Research in Business & Social Sciences

Volume

12

Issue

5

First Page

1252

Last Page

1267

DOI

http://dx.doi.org/10.6007/IJARBSS/v12-i5/13339

First Department

School of Business Administration

Acknowledgements

Open access article retrieved September 6, 2023 from https://hrmars.com/papers_submitted/13339/influence-of-heuristic-techniques-and-biases-in-investment-decision-making-a-conceptual-analysis-and-directions-for-future-research.pdf

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