Regret Aversion And Herding Biases Influence On Investment Decisions: The Mediating Role Of Risk Tolerance
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Abstract
This study is to describe the impact of regret aversion and herding biases of investors in investment decision. Risk tolerance used as mediator between regret aversion, herding behaviour and investment decisions. Survey questionnaire was used with sample size of 410 of investors in Indian stock exchange. PLS SEM has been used to check the impact of the variables in this study. Risk tolerance act as full mediator between regret aversion bias and investment decision, where as partial mediator between herding bias and investment decision. The study results showed the significant impact of risk tolerance on investment decision.
Only retail investors limited biases were shown in this study. Many more biases and factors also affect investment decision. Biases might have different effect on institutional investors, Advisor and analyst behavior. This aspect is the limitation of this study. This study is useful for analyst, advisors and investors in the investment decisions.
The present investigation aims to delve into the subject matter at hand, conducting a comprehensive study on the topic herding, regret aversion biases and investment decisions and suggests that these biases can significantly impact decision-making processes.
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