Paper: SSRN 2457425

Abstract

Investor behaviour often deviates from logic and reason, and investors display many behaviour biases that influence their investment decision-making processes.

Complexity vs Empirical Score

  • Math Complexity: 1.0/10
  • Empirical Rigor: 2.0/10
  • Quadrant: Philosophers — conceptual discussion, limited math and data

Why this score: The paper is descriptive and conceptual, discussing psychological biases without mathematical formalism or empirical backtesting, focusing on behavioral finance theory rather than quant implementation.

Research Flowchart

  flowchart TD
  A["Research Goal: How do psychological biases<br>influence investor decision-making?"] --> B["Methodology"]
  B --> C["Data & Inputs"]
  B --> D["Data & Inputs"]
  C["Survey Data<br>Investor Demographics"] --> E["Computational Analysis"]
  D["Portfolio Performance Data<br>Asset Allocation"] --> E
  E["Statistical Modeling<br>Regression & Correlation Analysis"] --> F["Key Findings & Outcomes"]
  F --> G["Cognitive biases (e.g.,<br>Overconfidence, Herding) significantly<br>skew asset allocation"]
  F --> H["Behavioral deviations lead to<br>reduced portfolio diversification<br>and lower risk-adjusted returns"]