Behavioural Biases and Digital Investment Decision-Making Among Retail Investors: Evidence from Emerging Financial Markets

Behavioural Biases, Behavioural Finance, Overconfidence Bias, Loss Aversion, Herding Bias, Anchoring Bias, Confirmation Bias, Emerging Financial Markets.

The rapid advancement of digital financial technologies has significantly transformed investment practices, enabling retail investors to access financial markets through online trading platforms, mobile applications, and fintech-enabled investment services. Despite these technological advancements, investment decisions are often influenced by behavioural biases that may lead to irrational financial choices. The present study examines the influence of behavioural biases on digital investment decision-making among retail investors in emerging financial markets. Specifically, the study investigates the impact of overconfidence bias, herding bias, loss aversion, anchoring bias, and confirmation bias on investors' digital investment decisions.

The study adopts a descriptive and analytical research design using a quantitative research approach. Primary data were collected through a structured questionnaire from 400 retail investors selected using a purposive sampling technique. The collected data were analyzed using Microsoft Excel 2021 by employing statistical tools such as frequency analysis, percentage analysis, mean, standard deviation, weighted mean, Pearson correlation, and multiple regression analysis.

The findings reveal that all selected behavioural biases have a significant positive influence on digital investment decision-making. Among the behavioural biases, loss aversion emerged as the most influential factor, followed by overconfidence bias, confirmation bias, herding bias, and anchoring bias. The regression analysis indicates that behavioural biases collectively explain a substantial proportion of the variation in digital investment decision-making among retail investors. The study concludes that although digital investment platforms enhance accessibility and convenience, investor psychology continues to play a crucial role in shaping investment behaviour. The findings offer valuable implications for retail investors, financial institutions, fintech companies, policymakers, and regulators in designing investor education programmes and promoting rational investment behaviour within emerging financial markets.