A Qualitative Study of Behavioral Biases Among Pakistani Investor Decisions


  • 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




behavioural finance, behaviural biases, individual investors, investment decisions


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.


Ahmad, Maqsood, & Shah, S. Z. A. (2020). Overconfidence heuristic-driven bias in investment decision-making and performance: mediating effects of risk perception and moderating effects of financial literacy. Journal of Economic and Administrative Sciences, ahead-of-p(ahead-of-print).

Ahmad, Mumtaz, Mehboob, I., & Abdin, S. Z. ul. (2021). How Behavioral Factors Influence Investment Performance of Individual Investors in Pakistan Stock Market: A Moderated Mediation Approach. Review of Economics and Development Studies, 7(3), 395–405.

Audi, M., Ali, A., & Hamadeh, H. F. (2022). Nexus Among Innovations, Financial Development and Economic Growth in Developing Countries. Journal of Applied Economic Sciences, 17(4).

Cao, M. M., Nguyen, N. T., & Tran, T. T. (2021). Behavioral Factors on Individual Investors’ Decision Making and Investment Performance: A Survey from the Vietnam Stock Market. Journal of Asian Finance, Economics and Business, 8(3), 845–853.

Jain, J., Walia, N., & Gupta, S. (2020). Evaluation of behavioral biases affecting investment decision making of individual equity investors by fuzzy analytic hierarchy process. Review of Behavioral Finance, 12(3), 297–314.

Jaiyeoba, H., & Haron, R. (2010). Qualitative Research in Financial Markets. Asian Review of Accounting, 18(1), ara.2010.34118aaa.002.

Kahneman, B. Y. D., & Tversky, A. (1979). Prospect Theory: An Analysis Of Decision Under Risk By. World Scientific Handbook in Financial Economic Series., 47(2), 263–291.

Kalra Sahi, S., & Pratap Arora, A. (2012). Individual investor biases: a segmentation analysis. Qualitative Research in Financial Markets, 4(1), 6–25.

Kashif, M., Palwishah, R., Ahmed, R. R., Vveinhardt, J., & Streimikiene, D. (2020). Do investors herd? An examination of Pakistan stock exchange. International Journal of Finance & Economics, ijfe.1895.

Kumar, S., & Goyal, N. (2015). Behavioural biases in investment decision making – a systematic literature review. Qualitative Research in Financial Markets, 7(1), 88–108.

Kumar, S., & Goyal, N. (2019). Exploring Behavioural Biases Among Indian Investors: A Qualitative Inquiry. Proceedings of the 45th International Academic Conference, London, May, 126–146.

Lao, P., & Singh, H. (2011). Herding behaviour in the Chinese and Indian stock markets. Journal of Asian Economics, 22(6), 495–506.

Mittal, S. K. (2019). Behavior biases and investment decision: theoretical and research framework. Qualitative Research in Financial Markets, ahead-of-p(ahead-of-print).

Mushinada, V. N. C., & Veluri, V. S. S. (2019). Elucidating investors rationality and behavioural biases in Indian stock market. Review of Behavioral Finance, 11(2), 201–219.

Özen, E., & Ersoy, G. (2019). The impact of financial literacy on cognitive biases of individual investors. Contemporary Studies in Economic and Financial Analysis, 101, 77–95.

R. Nofsinger, J., & Varma, A. (2014). Pound wise and penny foolish? OTC stock investor behavior. Review of Behavioral Finance, 6(1), 2–25.

Rashid, K., Tariq, Y. Bin, & Rehman, M. U. (2021). Behavioural errors and stock market investment decisions: recent evidence from Pakistan. Asian Journal of Accounting Research, ahead-of-p(ahead-of-print).

Sulehri, F. A., & Ali, A. (2020). Impact of political uncertainty on Pakistan stock exchange: An event study approach. Journal of Advanced Studies in Finance, 11(2), 194-207.

Thaler, R. H. (1999). Menta accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206.







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

Similar Articles

1-10 of 156

You may also start an advanced similarity search for this article.