A STUDY ON BEHAVIORAL FINANCE AND BEHAVIORAL BIASES: A LITERATURE REVIEW

Anuradha Samal Assistant Professor, Department of Business Administration, Sambalpur University Jyoti Vihar, Burla- 768019, Odisha, India, Mail ID: samalanu@gmail.com
Prof. (Dr.) A. K.Das Mohapatra Vice Chancellor, Odisha State Open University, Sambalpur, Odisha, India Mail ID: akdm.2002@gmail.com

Abstract

Due to globalisation, there has been significant change in the life style and the living standard of the people. So in order to meet such changes every individual has certain financial obligations which can be fulfilled by proper savings only. This results to individual investing their money in various financial instruments expecting a good return out of it. But sometimes such investors are affected by various behavioral biases which prompt them to take wrong financial decision. Behavioral Finance tries to analyze how the decision-making process of investors’ is influenced by their cognitive errors or mental mistakes and emotions. There exists a psychological influence on the actions of investors’ while taking financial decisions and its corresponding impact on share markets. The knowledge of these biases facilitates the investors’ in recognizing their own mistakes in order to ensure that such mistakes are not committed henceforth.

Keywords:

Behavioral Finance, biases, financial decisions, financial instruments.


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References


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