2023, Vol. 8, Special Issue 4

This study aims to identify the significant biases that affect individual behavior and investors' decision-making by conducting a comprehensive review of the literature available in the public domain. Research papers from published journals were identified based on keywords related to behavioral biases and investment decision-making. This paper includes research articles from 1979, when Kahneman and Tversky first introduced the behavioral finance concept, to 2022, when the most recent research was introduced. After that, research papers were classified based on behavioral biases, sampling techniques, data sources, Area of study, sample size, and sampling unit. It also includes the analytical tools used in the reviewed literature. Most of the existing work has identified that investors are irrational. The linkage between demographic factors and behavioral biases was analyzed from the existing literature. The relation between identified biases and investment decisions was also established. To the best of the author's knowledge, no review paper is available considering recent studies in behavioral finance. This paper analyzes the apparent biases and their relation to investors' decisions and performance. This paper also identified the positive and negative impact of identified behavioral biases on investment decision-making which was not mentioned in the earlier studies.