"Decoding Investor Psychology: Cognitive Biases In Equity Investments In The Kolhan Region"

Abstract

This study investigates the influence of cognitive biases on equity investors' decisions in Jharkhand's Kolhan region. Using data from structured questionnaires and robust statistical methods, this research analyzes how biases like overconfidence, confirmation bias, and optimism affect investor judgment, potentially leading to suboptimal financial outcomes. A sample of 300 equity investors—differentiated by age, gender, education level, and employment status—reveals how demographic factors contribute to susceptibility to these biases. Initial findings indicate that younger investors exhibit higher overconfidence, while older investors show a preference for conservative strategies. Male investors display a higher tendency toward confirmation bias, often disregarding information contrary to their preconceived views. While higher education levels correspond to a greater awareness of these biases, they do not necessarily result in reduced susceptibility. This study provides insights relevant to financial advisors and policymakers, emphasizing the need for tailored educational programs to mitigate bias impact on investment decisions. By exploring investor psychology in a specific emerging market context, the research adds depth to behavioral finance literature by quantifying cognitive biases' influence on financial decisions in a regional demographic.