Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange

In terms of returns, equity securities generally outperform other financial assets. However, contemporary research witnessed that individual investors remained less fortunate in getting benefits from stock market owing to their irrational choices as their investment decisions are motivated by behavi...

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Main Author:	Naveed, Farrukh
Format:	Thesis
Language:	eng eng
Published:	2022
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/11130/1/s902785_01.pdf https://etd.uum.edu.my/11130/2/s902785_02.pdf
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id	my-uum-etd.11130
record_format	uketd_dc
spelling	my-uum-etd.111302024-06-10T02:03:56Z Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange 2022 Naveed, Farrukh Mohd. Taib, Hasniza College of Business (COB) College of Business HG Finance In terms of returns, equity securities generally outperform other financial assets. However, contemporary research witnessed that individual investors remained less fortunate in getting benefits from stock market owing to their irrational choices as their investment decisions are motivated by behavioral factors. Extant literature confirmed that behavioral factors predict irrational trading behavior of individual investors, however, sufficient understanding is not yet reached to reduce the biased behavior of investors. Therefore, this study was conducted to investigate the impact of behavioural biases (overconfidence bias, self-attribution, availability bias, anchoring bias) and stress on the decision making of individual investors of Pakistan Stock Exchange (PSX). Besides, it was also intended to document the potential of information acquisition in reducing the biased behavior of individual investors. Using cluster sampling technique, questionnaire based quantitative data was collected from individual investors trading in PSX. Partial Least Squares Structural Equation Modelling (PLS-SEM) was applied on 390 useable questionnaires for data analysis. Result showed that overconfidence bias, availability bias, anchoring bias and stress are significantly associated with irrational investment decisions of individual investors. Furthermore, results revealed that self-attribution is not significant predictor of irrational decisions of investors. The result also revealed that moderating effect of information acquisition on the relationship of self-attribution and availability bias with investor decisions is not statistically significant. However, the information acquisition significantly moderates the relationship of overconfidence bias, anchoring bias and stress with individual investor decisions. Therefore, it can be asserted that acquisition of investment related information is essential for rational investment choices and earning superior returns from stock market. Furthermore, this study is beneficial for policymakers, as individual investors' financial well-being is critical to a country's long-term economic success. 2022 Thesis https://etd.uum.edu.my/11130/ https://etd.uum.edu.my/11130/1/s902785_01.pdf text eng 2025-05-30 staffonly https://etd.uum.edu.my/11130/2/s902785_02.pdf text eng public other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Mohd. Taib, Hasniza
topic	HG Finance
spellingShingle	HG Finance Naveed, Farrukh Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange
description	In terms of returns, equity securities generally outperform other financial assets. However, contemporary research witnessed that individual investors remained less fortunate in getting benefits from stock market owing to their irrational choices as their investment decisions are motivated by behavioral factors. Extant literature confirmed that behavioral factors predict irrational trading behavior of individual investors, however, sufficient understanding is not yet reached to reduce the biased behavior of investors. Therefore, this study was conducted to investigate the impact of behavioural biases (overconfidence bias, self-attribution, availability bias, anchoring bias) and stress on the decision making of individual investors of Pakistan Stock Exchange (PSX). Besides, it was also intended to document the potential of information acquisition in reducing the biased behavior of individual investors. Using cluster sampling technique, questionnaire based quantitative data was collected from individual investors trading in PSX. Partial Least Squares Structural Equation Modelling (PLS-SEM) was applied on 390 useable questionnaires for data analysis. Result showed that overconfidence bias, availability bias, anchoring bias and stress are significantly associated with irrational investment decisions of individual investors. Furthermore, results revealed that self-attribution is not significant predictor of irrational decisions of investors. The result also revealed that moderating effect of information acquisition on the relationship of self-attribution and availability bias with investor decisions is not statistically significant. However, the information acquisition significantly moderates the relationship of overconfidence bias, anchoring bias and stress with individual investor decisions. Therefore, it can be asserted that acquisition of investment related information is essential for rational investment choices and earning superior returns from stock market. Furthermore, this study is beneficial for policymakers, as individual investors' financial well-being is critical to a country's long-term economic success.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Naveed, Farrukh
author_facet	Naveed, Farrukh
author_sort	Naveed, Farrukh
title	Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange
title_short	Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange
title_full	Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange
title_fullStr	Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange
title_full_unstemmed	Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange
title_sort	behavioral biases, information acquisition and decisions of individual investors in pakistan stock exchange
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2022
url	https://etd.uum.edu.my/11130/1/s902785_01.pdf https://etd.uum.edu.my/11130/2/s902785_02.pdf
_version_	1804888197054857216

Behavioral biases, information acquisition and decisions of individual investors in Pakistan stock exchange

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