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Article
Influence of Heuristic Techniques and Biases in Investment Decision-Making: A Conceptual Analysis and Directions for Future Research
International Journal of Academic Research in Business and Social Sciences
(2022)
Abstract
Purpose: The primary purpose of the study was to examine the roles of heuristic techniques and cognitive biases in Investment decision making and suggest directions for future research. Design/Methodology/Approach: The study adopted the literature review method to solicit an understanding of the heuristics and biases central to behavioural finance and influence investment decision-making. Findings: The paper provides conceptual insights into the influence of heuristic techniques and cognitive biases in investment decision-making. Results from the conceptual analysis show that in recent times, investors in their bid to minimise losses and maximize gains employ a range of heuristics which often lead to systematic errors in judgment. Practical Implications: The paper encourages investors to prioritise financial literacy as a prerequisite to making investment decisions in the capital market and minimise the overreliance on heuristic techniques which often lead to biases. Originality/Value: The current study is the first to focus on the influence of both heuristic techniques and cognitive biases in investment decision-making together with suggested future research directions. This article enhances understanding of the behavioural finance approach to investment decision-making.
Keywords
- Heuristic Techniques,
- Cognitive Biases,
- Investment Decision-Making,
- Traditional Finance,
- Behavioural Finance.
Disciplines
Publication Date
May 9, 2022
DOI
10.6007/IJARBSS/v12-i5/13339
Publisher Statement
Open access article retrieved October 20, 2022 from https://hrmars.com/papers_submitted/13339/influence-of-heuristic-techniques-and-biases-in-investment-decision-making-a-conceptual-analysis-and-directions-for-future-research.pdf
Citation Information
Mensah Morris Ayaa, Williams Kwasi Peprah, Maxwell Okpoti Mensah and Adu Bismark Owusu-Sekyere. "Influence of Heuristic Techniques and Biases in Investment Decision-Making: A Conceptual Analysis and Directions for Future Research" International Journal of Academic Research in Business and Social Sciences Vol. 12 Iss. 5 (2022) p. 1252 - 1267 ISSN: 2222-6990 Available at: http://works.bepress.com/williamskwasi-peprah/2/