An Empirical Study on the Impact of Behavioural Bias on Investment Decision-Making

Traditional finance theory assumes that investors are rational, but as socio-economic development continues, numerous real-life examples and anomalies have shaken the foundations of the “rational man” assumption. Behavioural finance believes that investors’ perception and cognitive approach to the market and their own psychology deviate significantly from that of a rational person, and that securities investment behaviour is limited to logical rationality. In China’s securities market, due to the time constraints of development, most investors are characterised by overconfidence and cognitive biases. Therefore, this paper takes Chinese individual investors as the research object, adopts the method of questionnaire research and empirical analysis, selects eight representative irrational investment behaviours according to the theory of behavioural finance, investigates the group characteristics of individual investors through descriptive statistics, variance analysis and the establishment of logistic regression models, and investigates in depth the influence of different irrational behaviours of different individual investors on their own investment decisions The final conclusions are drawn and recommendations are made for individual investors in China.