Title: Analysing the influence of prospect factors on Indian retail investors' investment decisions

Authors: Arjun Hans; Farah S. Choudhary

Addresses: The Business School, University of Jammu, Jammu and Kashmir, 180006, India ' The Business School, University of Jammu, Jammu and Kashmir, 180006, India

Abstract: The behavioural factors impacting investment behaviour studied by behavioural finance, how good these studies hold in the Indian market context. The present research attempted to investigate the influence of prospect factors, i.e., risk aversion, loss aversion and regret aversion on investment patterns and behaviour in the Indian stock market. Investors are rational and markets are efficient as stated by traditional finance, gave this research the basic idea to explore the factors that impact the rationality of investors and the efficiency of markets. The objective of the study was to build a relationship between prospect theory and the investment performance of individual retail investors. Purposive and snowball sampling techniques of non-probability sampling were used. A sample size of 300 has been taken into study. EFA, CFA and SEM research tools were used in the prior research. Both risk and regret aversion had positive significant association with investment decisions of 14 and 25%, respectively.

Keywords: behavioural finance; Indian equity market; investment decisions; investment performance; prospect theory.

DOI: 10.1504/IJBAF.2024.139369

International Journal of Behavioural Accounting and Finance, 2024 Vol.7 No.2, pp.193 - 213

Received: 01 Jun 2023
Accepted: 03 May 2024
Published online: 01 Jul 2024 *

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