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.
International Journal of Academic Research in Business & Social Sciences
School of Business Administration
Ayaa, Mensah Morris; Peprah, Williams Kwasi; Mensah, Maxwell Okpoti; Owusu-Sekyere, Adu Bismark; and Daniel, Bamfo, "Influence of Heuristic Techniques and Biases in Investment Decision-Making: A Conceptual Analysis and Directions for Future Research" (2022). Faculty Publications. 4735.
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