The Role on Heuristic Biases Over Investor Decision Making—A Risk Perception as Mediator

The study examines the direct and indirect effects of heuristic biases on investors’ behavior on decision making (through how they perceive risk). The research also examines the potential moderating role of extraversion in investor’s decision both direct and indirect connections between perceptual biases with irrational behavior. The findings of this study shows that there is a direct and indirect impact of heuristic biases on investor’s decision making via risk perception. This is based on questionnaire data from 325 Indian investors registered with various brokerage firms, as well as analysis (mediation and moderation) performed in SPSS using the process macro technique (proposed by Hayes in Introduction to Mediation, Moderation, and Conditional Process Analysis: A Regression Based Approach. Guilford Publications, New York, 2017 [13]). Extraversion, a personality trait, was discovered to regulate both direct and indirect links among heuristic prejudices and irrational behavior.