Investment Decision-Making Process between Different Groups of Investors: A Study of Indian Stock Market

Abstract

This article attempts to identify differences in perception for the seven most prominent behavioural biases between two groups of individual investors: (a) experienced and (b) new to the market investors in investment decision-making. Primary data have been collected from the active individual stock market participants from the four states of India, namely, Jharkhand, Bihar, Odisha and West Bengal. Findings of this study suggest that respondents have a similar perception for availability bias, representativeness and emotional contagion while the other four factors such as herding, informational cascades, anchoring and overconfidence show significant discrimination in investment decision-making between the two groups of investors. Herding is identified as the most discriminatory factor for investor groups.