BEHAVIORAL FACTORS INFLUENCING INDIVIDUAL INVESTORS’ DECISION MAKING: STUDY OF PAKISTAN STOCK EXCHANGE (PSX)

Abstract

The main objective of this research is to explore the behavioral factors that can influence the decision making of individual investors of Pakistan stock exchange. The questionnaires were sent to 385 individual investors, among them 350 individual investors respond which is 80% of the total sample size. The Cronbach’s alpha test and regression analysis were used to analyze the data. The results found that herding bias and market information have positive influence on the investors’ decision making while prospect and heuristic biases are insignificant. Among all variables market information have greatest influence on the decision making of investors at Pakistan stock exchange. That’s show investors at PSX are more concern with market information while taking their investment decision.