Heuristics in Behavioural Finance: A Multi-group Analysis

Authors

  • Renuka Sharma, Kiran Mehta

Abstract

Behaviour Finance justifies market anomalies through behavioural biases. Extent of behavioural
biases such as heuristics, overconfidence and herd behaviour, on investment decision of individual investors
is another key issue in behaviour finance. There are various reasons for biasness and heuristics is one of the
most essential explanations for biasness. The objective of the study is to test the validity of measurement
scale developed to evaluate the effect of heuristics on individual investors’ investment decisions. The
research findings are based on primary data analysis collected through a structured questionnaire. A dataset
of 738 respondents was used to do multi-group analysis. Gender, income level and investment experience
are the three moderators to obtain the results. The validation of an existing scale is the major findings of
current study. These findings are useful for different stakeholders.

Published

2020-04-30

Issue

Section

Articles