Impact of Cognitive Biases on Financial Decision Making In Stock Market of Pakistan

Author(s)

Diyala Aziz , Shagufta Parveen , Samar Aziz ,

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Volume 5 - March 2023 (03)

Abstract

This research study investigates the relationship between financial decision making process and cognitive bias in stock market of Pakistan. Cognitive bias is the type of error in thinking in process of financial decision making in the stock market of Pakistan. Cognitive bias is independent variable. Cognitive bias is computed by overconfidence bias, self-attribution bias, familiarity bias and conformation bias these are the different form of cognitive biases. Financial decision making is dependent variable. The individual investor play important role in stock market. This research has been carried out using primary data and was collected through questionnaire. The questionnaire used in this thesis was filled from Islamabad stock exchange. Total three hundred questionnaires were filled for this research. The empirical result of this thesis indicates that there is moderate relationship between dependent variable (financial decision making process) and independent variable (cognitive bias) in Islamabad stock exchange.

Keywords

financial decision making process, overconfidence bias, conformation bias, familiarity bias and self-attribution bias. 

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Cite this Article:

Diyala Aziz, Impact of Cognitive Biases on Financial Decision Making In Stock Market of Pakistan, International Journal of Empirical Finance and Management Sciences 03(2023):40-60 DOI: