Role of Behavioral Biases Towards Investment Decision in Indian Capital Market

Abstract

Behavioral biases significantly influence investment decisions in the Indian capital market, shaping the behavior of investors and impacting market dynamics. This paper explores the role of behavioral biases in investment decision-making within the context of the Indian capital market. Drawing on a comprehensive review of literature and empirical evidence, this study examines various behavioural biases such as over confidence, loss aversion, herding behavior, anchoring, and cognitive dissonance, among others, and their implications for investment choices. This research contributes to the understanding of behavioral finance in the Indian context and provides valuable insights for investors, policy makers, and market participants to enhance decision-making processes and improve market efficiency in the Indian capital market.