How Biases Affect Investor Behaviour
How Biases Affect Investor Behaviour ArXiv ID: ssrn-2457425 “View on arXiv” Authors: Unknown Abstract Investor behaviour often deviates from logic and reason, and investors display many behaviour biases that influence their investment decision-making processes. Keywords: Behavioral Finance, Investor Psychology, Decision Making Biases, Asset Allocation, Portfolio Management Complexity vs Empirical Score Math Complexity: 1.0/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is descriptive and conceptual, discussing psychological biases without mathematical formalism or empirical backtesting, focusing on behavioral finance theory rather than quant implementation. 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"]