Deep Learning Tools for Predicting Stock Market Movements

15Influence of Behavioral Biases on Investor Decision-Making in Delhi-NCR

Pooja Gahlot^1*, Kanika Sachdeva¹, Shikha Agnihotri² and Jagat Narayan Giri¹

¹School of Business, Sushant University, Gurugram, India

²School of Business, IMS Ghaziabad, Uttar Pradesh, India

Abstract

The traditional view in finance is that investments must be made using rational processes. Before making decisions, investors evaluate both risks and returns to maximize their long-term profits. Behavioral finance presents a challenge to traditional finance because it introduces psychological factors that impact their choices. The fluctuations in the price of securities are caused by irrational activity on the part of investors and abnormalities in the market. As a direct result, analyses have been done to investigate the influence of various biases and factors on traders’ decisions. The primary objective of this paper research is to study and analyze the consequences of three biases in IT, banking sectors, and academic industry. There are three cognitive biases: overconfidence, optimism, and the illusion of control. A total of 362 people filled out the structured questionnaire, which was utilized to gather data. Data analysis involved using SmartPLS software to apply the PLS algorithm and bootstrapping technique in partial least squares structural equation modeling. The research showed that there is a meaningful connection between having an excessive amount of confidence and making financial decisions. At ...