ABSTRACT:Herding, Anchoring, Loss Aversion, Overconfidence, Confirmation Bias, and the Disposition Effect are the six behavioural biases whose prevalence, co-existence and Analysis to study whether biases operate in isolation or accumulate to compound decision-making impairment. The hypothesis of mutual exclusivity was rejected as 86.8% of investors exhibit two or more biases simultaneously according to the results. In the list of predictors, Herding and Overconfidence were shown to be the strongest while Loss Aversion ranked last thus highlighting a notable divergence from the foundational Prospect Theory. Cognitive inconsistency was discovered as 32.1% of investors simultaneously held the contradictory pairing of both Herding as well as Overconfidence. A substantial increase in decision making impairment with each additional bias was confirmed with the use of ANOVA while regression analysis established 61.3% of decision-making variation. The need for holistic, multi-bias aware approaches in investor education, financial advisory as well as regulatory policy were highlighted in the findings. compounding impact on investment decision making of 159 individual retail investors in India. A structured Likert-scale questionnaire was analysed using Random Forest Classification, One-Way ANOVA, Simple Linear Regression, and Cooccurrence

KEYWORDS:Behavioural Finance, Investment Decision-Making, Herding, Overconfidence, Anchoring, Random Forest, Co-occurrence Analysis, Indian Retail Investors.

BEHAVIOURAL BIASES AND THEIR IMPACT ON INVESTMENT DECISION-MAKING: A STUDY OF INDIVIDUAL INVESTORS IN INDIA

DHREETI SANGHAVI
RIYA MALHOTRA
ANIL SURENDRA MODI SCHOOL OF COMMERCE NMIMS (MUMBAI)