Influence of Behavior Biases on the Financial Decision Making of Male and Female Investors of Pakistan

Abstract

Behavioral biases are systematic variations from rationality that significantly impact individual decision-making and judgments. This study investigates the influence of behavioral biases on the financial decision-making of male and female investors in Pakistan using primary data. The research addresses three key questions:(1) How does behavioral biases affect the investment performance of male and female investors in Pakistan? (2) What are the differences and similarities between male and female investors in Pakistan regarding their behavioral biases and investment decisions? (3) How doses Financial Literacy play a moderator role in understanding the most common behavioral biases among male and female investors in Pakistan? Primary data were collected through a carefully designed survey questionnaire (which was adopted from previous research papers). Descriptive statistics, inferential statistics, and regression analysis methods were employed using SPSS software to analyze the data. The findings contribute to a deeper understanding of the behavioral dynamics shaping investment decisions among Pakistani investors. By identifying common behavioral biases and their implications for investment performance, the research provides valuable insights for policymakers, financial practitioners, and investors aiming to refine their decision-making processes. Furthermore, by comparing the behavioral biases and financial decisions of male and female investors, this study interprets gender-specific factors influencing financial decision-making. Overall, this research offers critical perspectives on the role of behavioral biases in investment behavior and highlights the requirement for targeted financial education and policy interventions to enhance market efficiency and investor outcomes in Pakistan.