Examining The Influence of Behavioural Finance on Institutional ‎Investors and Their Financial DecisionsMaking in Financial Markets

  • Authors

    • Pankaj Azad Deputy Director (GA), Food Safety and Standards Authority of India, Manav Rachna International Institute of Research and Studies, Delhi, India
    • Manika Sharma Associate Professor, Department of Management, Manav Rachna International Institute of Research and Studies, Faridabad, Haryana, ‎India
    https://doi.org/10.14419/cky8bc30

    Received date: August 7, 2025

    Accepted date: September 17, 2025

    Published date: November 6, 2025

  • Behavioural Finance; Institutional Investors; Prospect Theory; Overconfidence Bias; Herding Behaviour; Anchoring Heuristic; Mental Accounting; ‎Investment Decision-Making; Financial Market Stability; Regulatory Frameworks

  • Abstract

    Traditional economic theory suggests that investment is all about making smart choices that maximize one's well-being. Behavioral finance ‎takes issue with this by showing how investors can be impacted by cognitive, emotional, and psychological biases. This research focuses ‎on institutional investors and the role of behavioral finance in affecting their investment decisions. This study seeks to evaluate the effect of ‎some of the most important cognitive biases, such as mental accounting, herding, overconfidence, and prospect theory, on investment choices-‎es made by dominant institutions.‎

    Institutional investors have vast amounts of data and analytics; however, their possible biases can lower market efficiency and create financial issues. This article synthesizes recent studies of institutional investment behavioral biases and their impact on portfolio management, ‎market volatility, and regulatory policy. The study seeks to improve decision-making models, risk management practices, and regulatory ‎policy that foster rational investing behavior by discerning these biases. The results inform regulators, investment managers, and financial ‎professionals how to lessen the negative impacts of behavioral biases in institutional investment strategies‎.

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  • How to Cite

    Azad, P., & Sharma , M. . (2025). Examining The Influence of Behavioural Finance on Institutional ‎Investors and Their Financial DecisionsMaking in Financial Markets. International Journal of Accounting and Economics Studies, 12(7), 197-202. https://doi.org/10.14419/cky8bc30