Title: The mechanism and influence of herding effect in investment decision making: case of enculturated actors

Authors: Rajdeep Kumar Raut; Manish Kumar

Addresses: Amity University, Rupaspur, Bailey Road, Patna, Bihar – 801503, India ' Department of Commerce, Tezpur University, Napaam, Sonitpur, Assam – 784 028, India

Abstract: This paper attempts to broaden the standard financial discourse by bringing insights into human behaviour not just from psychology, but also from social anthropology. This study investigates the mechanism and influence of herding effect in the investment decision making of individual investors. This study explores how individuals process information of social opinion in their decision making either by ignoring their own information (rational herding) or without ignoring it (irrational herding) and deviate from the realm of rational agents. For the purpose of investigation, a mixed survey approach was adopted. Data obtained from the respondents were analysed using SPSS statistical package 21.0. Results show that both rational and irrational herding were significantly differentiated by individual investors in their decision-making process on the ground of gender, age groups and investment experience, however, marital status of respondents was not found significant to mark the herding effect in their decision making.

Keywords: social anthropology; herding; security market; decision making.

DOI: 10.1504/IJICBM.2019.104784

International Journal of Indian Culture and Business Management, 2019 Vol.19 No.4, pp.418 - 433

Received: 15 Jun 2017
Accepted: 19 Oct 2018
Published online: 31 Jan 2020 *

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