1Research Scholar, Kiit School of Management, Kiit University, Bhubaneswar, Odisha.
2Professor- Strategic Management, Kiit School Of Management, Kiit University, Bhubaneswar, Odisha.
Online published on 4 October, 2017.
The study aims at finding out whether Overconfidence bias, Herd behavior bias, and Risk tolerance bias influences investment performance of capital market investors in the Eastern part of India. A survey was conducted in eastern India covering 106 active investors and contained contextual version scales of studied constructs. Exploratory factor analysis and Cronbach alpha tests were used to validate the scales. To obtain the findings on the studied variables, descriptive statistics, and multiple regression analysis were conducted. Results revealed that dispositional optimism and unrealistic optimism under overconfidence bias; trading and speed, and market-wide herding under herd behavior bias; calculative risk and speculative risk under risk tolerance bias affects the investment performance. Factors such as; situational optimism, others’ investment choices and impulsive risk were not found to be significantly affecting the investment performance in Eastern India. The study put forward how behavioral biases influence investment performance and studying this behavior has an immense influence on the financial industry in general.
Overconfidence Bias, Herd Behavior, Risk Tolerance Bias, Investment Performance
