Acta Univ. Bohem. Merid. 2024, 27(3):81-93 | DOI: 10.32725/acta.2024.014731


Behavioural Biases in Financial Investments: A Comprehensive Literature Review

Sadhna Bagchi1, Lalit Prasad2, Mukesh Shrivastava3
1 AAFT University of Media and Arts, Raipur, Chhattisgarh
2 Management Studies, Pune, Maharashtra
3 Wells Fargo International Solutions Pvt Limited, Hyderabad, Telangana

This study uses a systematic assessment of 1980–2024 literature to examine how behavioural biases affect financial investment decisions. Psychology and emotion influence investor behaviour in behavioural finance, challenging rational decision-making. The study analyses 40 scientific papers from Google Scholar and PubMed using a systematic literature review (SLR) technique and predetermined keywords and inclusion criteria.
Cognitive biases like overconfidence and conservatism and emotional biases like loss aversion and regret aversion strongly influence investment decisions. The study also investigates how post-COVID-19 economic trends and generational behaviours, notably among Millennials and Generation Z, have changed investment tactics. Anchoring, mental accounting, herding, and confirmation biases affect market results and individual decision-making. Financial literacy, planning, and technology moderate these biases, according to this review. The study suggests that behavioural psychology is crucial to designing better investment strategies and provides a roadmap for future research on biases and financial decision-making. 

Keywords: Behavioural Biases, Cognitive, rational thinking, emotional biases, Risk aversion 
JEL classification: G11, G41

Accepted: April 16, 2025; Published: April 28, 2025  Show citation

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Bagchi, S., Prasad, L., & Shrivastava, M. (2024).
Behavioural Biases in Financial Investments: A Comprehensive Literature Review. Acta Universitatis Bohemiae Meridionalis, 27(3), 81-93. doi: 10.32725/acta.2024.014
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