Heuristics in Behavioural Finance: A Multi-group Analysis

Behaviour Finance justifies market anomalies through behavioural biases. Extent of behaviouralbiases such as heuristics, overconfidence and herd behaviour, on investment decision of individual investorsis another key issue in behaviour finance. There are various reasons for biasness and heuristics is one of themost essential explanations for biasness. The objective of the study is to test the validity of measurementscale developed to evaluate the effect of heuristics on individual investors’ investment decisions. Theresearch findings are based on primary data analysis collected through a structured questionnaire. A datasetof 738 respondents was used to do multi-group analysis. Gender, income level and investment experienceare the three moderators to obtain the results. The validation of an existing scale is the major findings ofcurrent study. These findings are useful for different stakeholders.