IMPACT OF BEHAVIORAL BIASES ON INVESTMENT DECISIONS OF WOMEN INVESTORS: A PLS-SEM AND IPMA APPROACH

Abstract

This cross-sectional study examines the role of behavioral biases in shaping investment decision-making among women investors through an integrated behavioral framework. Using survey data and drawing on Prospect Theory, Bounded Rationality, and the Theory of Planned Behavior (TPB), the research explores how heuristic-driven biases influence financial decisions-making. Specifically, the study investigates the impact of heuristics on behavioral biases, including prospect-related bias and herding behavior on investment decision-making. The primary data was collected from women investors using a structured questionnaire and analyzed using PLS-SEM and IPMA. The herding bias significantly influences investment decision-making among women investors refers to the phenomenon that occurs when individuals mimic the actions of others rather than relying on their own analysis, leading to possibly irrational investment decisions. The findings reveal that herding bias significantly influences investment decision-making among women investors refers to the phenomenon that occurs when individuals mimic the actions of others rather than relying on their own analysis, leading to possibly irrational investment decisions. Similarly, heuristics significantly influence behavioral biases, which in turn shape key components of decision-making. Furthermore, prospect-related bias also affects attitudes toward investment. The study contributes to the behavioral finance literature by integrating cognitive and psychological into a unified framework and providing a gender-specific understanding of investment behavior. The findings offer valuable insights for policymakers and financial practitioners in designing targeted interventions and strategies to enhance rational investment decision-making among women investors.

Keywords: Herding bias, Investment decisions, PLS-SEM, Women investors, IPMA, Prospect bias and Heuristic bias.