Systematic Literature Review: Behavioural Biases as the Determinants of Herding

This systematic literature review explores the role of behavioural biases in driving herding behaviour in global stock markets. Analysing Scopus and SSCI-indexed research articles from January 2020 to November 2022, this study identifies five critical behavioural biases—representativeness, anchoring, availability, gambler fallacy, and overconfidence—as significant determinants of herding. Herding behaviour, characterised by investors following the actions of others, is found to have detrimental effects on individual investment portfolios and market perceptions. The research also suggests policy implications for financial industry professionals, emphasising the importance of recognising and mitigating these biases to enhance investment performance.