A Qualitative Study of Behavioral Biases Among Pakistani Investor Decisions

Authors

  • Faiza Ahmed Lecturer, Department of Business Administration, Indus University, Karachi, Pakistan Author
  • Maria Siddiqui MS/MPhil, Department of Business Administration, Indus University, Karachi, Pakistan Author
  • Muhammad Qaveem Akhtar Khan Lecturer, Department of Business Administration, Indus University, Karachi, Pakistan Author
  • Asadullah Lakho Lecturer, Department of Business Administration, Iqra University, Karachi, Pakistan Author

DOI:

https://doi.org/10.61506/01.00066

Keywords:

behavioural finance, behaviural biases, individual investors, investment decisions

Abstract

The basic purpose of this study is to highlight the importance of behavioural biases in individual investors' decisions that cause deviation from rationality. It also helps them to accelerate their abilities in investment decision-making. This study used semi-structured open-ended questions to explore the behavioural bias in six individual investors of the Pakistan stock market. The thematic content analysis is used to analyze the data. This study explores eight behavioural biases of the individual investor in the Pakistan stock market and process it does not seem that all the investors will suffer from all the behavioural biases simultaneously. Their decision is based not only on quantitative analysis but also influenced by cognitive, emotional, and social biases. They depend on other sources of information before investing in the stock market. This study focuses on behavioural biases of individual investors of the Pakistan stock market so their results can not be generalized to institutional investors, real estate investors, or any other geographical area due to culture differences, education level, values, and financial structure. As this study explores only individual behavioural bias it leaves many areas that are unexplained for further research like institutional investors behavioural bias, real estate investors behavioural bias with more sample size.   The practical implications are it is helpful for companies, policymakers, and securities issuers can observe the investor interest and behaviour before issuing securities into the market. As far as the social implication is concerned it is good for investors to understand the several behavioral biases and make sound investment decisions that mitigate their risk. This paper explores the concept of behavioural biases in individual decision-making and adds value to the existing literature on behavioural finance.

References

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Published

2023-12-25

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Section

Articles

How to Cite

Ahmed, F., Siddiqui, M. ., Khan, M. Q. A. ., & Lakho, A. . (2023). A Qualitative Study of Behavioral Biases Among Pakistani Investor Decisions. Bulletin of Business and Economics (BBE), 12(4), 1-5. https://doi.org/10.61506/01.00066

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