144pm - 9.epra Journals 14097

Journal DOI: 10.36713/epra1013|SJIF Impact Factor (2023): 8.
048 ISSN: 2347-4378

EPRA International Journal of Economics, Business and Management Studies (EBMS)
Volume: 10 | Issue: 8|August 2023 -Peer-Reviewed Journal
BEHAVIORAL BIASES IN ONLINE INVESTMENT

PLATFORMS: IMPLICATIONS FOR INVESTOR
DECISION – MAKING
Ananta Dutta, Navya Achan
ABSTRACT
The way people interact with the financial markets has changed dramatically as a result of the explosive rise of
online investment platforms. The complicated interplay between human psychology and investment decision-
making is revealed by this technical advancement. In order to provide light on the influence of behavioural biases
on investor decision-making processes, this study examines the existence and significance of behavioural biases in
the context of online investment platforms.
This paper identifies and examines the behavioural biases frequently noticed in online investment contexts by
drawing on a thorough examination of the available literature. These deeply ingrained cognitive biases frequently
cause investors to make poor choices, which have an impact on the success of their portfolios and their financial
situation. We go into the specific ways in which prejudices materialise within the digital investment ecosystem
by exploring real-world case studies and empirical data.
This article also examines the techniques used by online investment platforms to lessen the impact of biases. It
looks into how robo-advisors, artificial intelligence, and algorithms might help investors understand their
inclinations. The report also emphasises the need of cognitive empowerment and investor education as tools to
combat these biases.
INTRODUCTION
With the introduction of online investment platforms, the world of finance has never been more convenient or
accessible, allowing people to conduct financial activities from the comfort of their homes. Investors are now
faced with a new set of issues as a result of the convergence of human psychology and digital investment settings
as technology continues to change the financial landscape. This research analyses the deep ramifications of the
complex web of behavioural biases that affect decision-making on online investment platforms.
Traditional economic theory has long made the assumption that people make unbiased, logical decisions when it
comes to money. However, behavioural economics research has shown that cognitive biases frequently affect
human decision-making and can diverge from logical choices. These biases can lead to unfavourable investing
decisions, warped risk perceptions, and eventually negative effects on portfolio performance.
Online investment platforms have given these prejudices a dynamic twist. These platforms attempt to simplify
investment procedures with attributes including real-time information availability, automated trading options, and
user-friendly interfaces. However, they also create an environment where prejudices can proliferate and affect
judgement. The simplicity of trading, the speed at which information is delivered, and the incorporation of
gamified aspects into platforms can all lead to increased cognitive biases.
The purpose of this study is to identify and comprehend the behavioural biases that frequently appear in the online
investment environment. We can shed light on the difficulties faced by investors navigating these digitally-
mediated environments by detecting these biases and analysing how they affect investor decisions. We will also
look at the methods used by online investment platforms to lessen the effects of biases, from algorithmic tools to
educational programmes.
2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

56
Journal DOI: 10.36713/epra1013|SJIF Impact Factor (2023): 8.048 ISSN: 2347-4378
BEHAVIORAL BIASES IN INVESTMENT DECISION MAKING

Investors frequently look for and interpret information that supports their current opinions, ignoring or
downplaying evidence that is contrary to those beliefs (confirmation bias). This may result in overconfidence and
a failure to fully take into account different viewpoints.
Overconfidence Bias: Investors frequently overrate their own capabilities while underestimating the danger and
uncertainty involved in making investments. This may result in irrational trading, inadequate diversification, and
eventually worse results.
Anchoring Bias: When making decisions, investors frequently rely too much on the first piece of information they
are presented with (the "anchor"). Even though it is unrelated to the issue at hand, this anchor can affect
judgements that come after.
Loss Aversion: Investors are reluctant to sell failing investments because they feel the agony of losses more keenly
than the joy of profits. This may lead to an excessive weighting of underperforming assets in a portfolio.
Herding Behaviour: Rather than performing their own research, investors frequently follow the herd and make
decisions based on what other people are doing. When everyone rushes into or out of specific investments at once,
this can cause market bubbles and crashes.
Disposition Effect: Loss aversion and this bias are strongly related. Investors typically cling onto failing
investments for too long in the hopes that they will eventually recover while selling winning investments
prematurely to lock in gains.
Online Investment Platform

Features
Investment alternatives: A range of investment alternatives are available on online platforms, enabling users to
invest in a range of financial products, including stocks, bonds, ETFs, mutual funds, commodities, real estate, and
more. Access to alternative assets like bitcoins is also provided by some sites.
Tools for Research and Analysis: Many platforms offer resources for finding and evaluating investment
opportunities. Stock screeners, technical and fundamental analysis, performance information from the past, and
research reports are a few examples of these instruments.
User-Friendly Interface: Online investment platforms are made to have a user-friendly interface that makes it
simple for both novice and seasoned investors to move about the platform, place trades, and manage their
portfolios.
Mobile Apps: The majority of platforms have mobile apps for smartphones and tablets that help users carry out
trades, manage their investments on-the-go, and keep up with market news.
Customization: Investors can frequently alter their risk tolerance, investment objectives, and asset allocation
choices. On the basis of these preferences, the platform could offer recommendations.
Automated Investment: A number of platforms provide automated investment services, also known as "robo-
advisors." Based on the user's risk profile and objectives, these services utilise algorithms to build and maintain
diverse portfolios.
Reputable platforms put robust security measures in place to protect users' private and financial data, such as
encryption, two-factor authentication, and secure data storage.
Advantages
Convenience: Online investing enables you to manage your portfolio from the comfort of your home or any
location with an internet connection. This convenience eliminates the need to travel to actual banks or brokerage
locations.

57
Cost-Effectiveness: Compared to conventional brokerage services, several online investment platforms provide
lower trading costs and expenses. Even better, some platforms let you trade particular investments without paying
any commissions, which might eventually save you money.
Flexibility and control: Online investing gives you more power over your investment choices. Depending on your
preferences, risk tolerance, and financial objectives, you can conduct research, choose, and manage your assets.
You are not dependent on a financial advisor to decide things for you.
Information Access: Online resources offer a variety of data and instruments for researching, evaluating investing
opportunities, and monitoring market movements. Investors can make better selections thanks to this access to
information.
Diversification: Online investing platforms frequently provide a broad selection of investment options, including
stocks, bonds, ETFs, mutual funds, and more. By spreading your investments over various asset classes, you can
do this to diversify your portfolio and lower your risk.
Real-time trading: Online trading enables you to carry out trades immediately. This is beneficial when responding
to market news, timely portfolio modifications, or taking advantage of short-term trading opportunities.
You may readily view your account information, portfolio performance, transaction history, and other crucial
details in real time when you invest online. You can stay organised and make knowledgeable judgements thanks
to this transparency.
Disadvantages
Lack of Personalised Advice: Online investing platforms could not provide you with the individualised advice
and direction you might get from a real financial advisor. This might be a drawback, especially for novice investors
who might want guidance with difficult financial choices.
Making impulsive decisions based on emotions, market news, or short-term trends is made simpler for investors
who invest online. Poor investing decisions and losses can result from emotional decision-making.
Limited personal Interaction: The personal interaction that can offer assurance, education, and a deeper
understanding of your financial condition is absent from online investing. Some investors might value having a
professional advisor they can talk to about their investments and problems. Technical Problems and Glitches:
Online platforms occasionally have technical problems, glitches, or outages that make it difficult for you to access
your account, make trades, or manage your investments.
ack of Investor Education: Despite the fact that some online platforms provide instructional materials, many
investors might not use them, which could result in them making uneducated investing decisions.
Lack of Personal Accountability: dealing with a financial advisor who has a fiduciary duty to act in your best
interest can provide the personal accountability that comes with dealing with online platforms.
Market Volatility Risk: If assets are not managed carefully, online investing may expose investors to market
volatility and the possibility of major price movements, which could result in losses.
Literature Review
Grinblatt and Keloharju's "Investor Behaviour and the Internet" (2001):
This study looked into the effects of the emergence of internet trading platforms on investor behaviour. The
authors discovered that increasing trading activity, particularly among younger investors, was a result of internet
trading's simplicity. It was determined that overconfidence bias may have enhanced activity in this area.
Hwang and Salmon (2004)'s "Herding Behaviour and Investor Sentiment in Online Stock Trading":
This study looked at emotion and herding behaviour in online stock trading. The authors discovered that
sentiment-based herding behaviour among internet traders causes overreaction to market news. This behaviour is
consistent with the impact of emotional and social prejudices.

58
According to Kumar, Kumar, and Varma's (2012) study, "Behavioural Biases of Mutual Fund Investors,"
This study investigated how behavioural biases influence the behaviour of mutual fund investors. The researchers
discovered evidence of biases that can result in poor investment decisions, such as swarming behaviour and
pursuing prior performance. Additionally, these biases were noted in relation to online investing platforms.
Barber, Odean, and Zheng's article "The Role of Behavioural Biases in Exchange-Traded Fund Investment" from
2005:
The behavioural biases associated with investing in exchange-traded funds (ETFs) were the main focus of this
study. The authors discovered that ETF investors display herding-like behaviour, which results in subpar returns
because of purchasing high and selling low. This behaviour might be influenced by how simple it is to trade ETFs
online.
Nagar and Maheswaran's (2018) "Behavioural Biases of Online Investors: A Literature Review"
An overview of the many behavioural biases that have an impact on online investors is provided by this literature
review. It highlights biases like overconfidence, herding, loss aversion, and framing effects in online investment
situations by summarising major findings from several studies.
The question "Do Investors Trade Too Much?" Barber and Odean's 2000 article
This study examined the effects of excessive trading on the returns of individual investors while not being solely
focused on online investing. It was discovered that because of transaction costs, excessive trading lowers returns.
Online trading platforms might make trading more often possible and magnify the effects of biases that favour
overtrading.
Key Finding and Trends

The presence of behavioural biases in online investment decision-making has been continuously shown by
numerous studies conducted over a variety of time periods and computing platforms. Investors that trade online
frequently exhibit biases such overconfidence, herding behaviour, loss aversion, and confirmation bias.
Impact of Information Accessibility: The abundance of information available online seems to amplify some
prejudices. Investors clearly exhibit confirmation bias as they seek out information only that supports their
previous ideas. Decisions are also influenced by availability bias, as investors prioritise information that is easily
accessible, thus resulting in less-than-ideal results.
Herding Behaviour in Digital Environments: Investors appear to be more likely to follow the herd and base
judgements on the mood of the market on online platforms. Overreactions to news or trends and inflated market
fluctuations might come from this.
Trading Frequency and Overconfidence: Higher trading frequency is made possible by the simplicity of online
trading, which is related to overconfidence bias. Investors engage in excessive activity, incur high transaction
costs, and receive inferior returns because they feel they have superior information and trading skills.
Impact on Portfolio Performance: A recurring pattern shows that behavioural biases have a detrimental impact on
portfolio performance. Biases-driven overtrading might reduce returns due to higher transaction costs and less-
than-ideal trade timing.
Technology and Digital Platforms: The environment offered by online investing platforms encourages prejudices.
Making impulsive decisions that are motivated by emotions and cognitive shortcuts is made easier by the real-
time nature of trading and information intake.
Influence of social media: The emergence of social media adds a new facet to the behavioural biases that exist in
online investment. The intensification of herding behaviour and the impact on investment choices can result from
the feeling being amplified through online networks.
Biases in conventional and Online Investing Contexts Intersect: Some biases seen in conventional investing
contexts are still present in online investing contexts. However, these prejudices may be made worse by the
quickness and accessibility of internet platforms.

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Research gap
Limited Exploration of Personalized Online Debiasing Strategies
While existing literature acknowledges the presence of behavioral biases in online investment decision-making,
there is a research gap in the investigation of personalized debiasing strategies tailored to individual online
investors. While decision support tools and algorithms have been proposed as potential solutions, there is a lack
of comprehensive exploration into how these tools can be customized to address the specific biases exhibited by
different investors on digital platforms.
Rationale:
Individual Variation in Biases: Behavioral biases can manifest differently in various individuals due to factors
such as experience, risk tolerance, and investment goals. A personalized approach is needed to effectively target
and mitigate these biases.
Effectiveness of Generic Tools: Current debiasing strategies often take a one-size-fits-all approach. However, the
efficacy of these generic tools might be limited in addressing the nuanced biases of individual investors.
Technology's Potential: The advancements in technology allow for the development of tools that can analyze an
investor's historical behavior, identify recurring biases, and provide targeted interventions.
Investor Engagement: Personalized debiasing strategies could enhance investor engagement by delivering
interventions that resonate with their specific behavioral tendencies, making the process of mitigating biases more
engaging and effective.
Potential Research Approach:

Conduct a study that focuses on developing and testing personalized debiasing strategies for online investors.
This could involve:
Data Collection: Gather data from online investment platforms, possibly through collaboration with brokerage
firms or robo-advisors. Collect data on investors' behaviors, biases exhibited, and their investment outcomes.
Algorithm Development: Utilize machine learning algorithms to analyze individual investor behavior and identify
recurring behavioral biases. Develop algorithms that can predict the likelihood of specific biases in different
investment scenarios.
Personalized Interventions: Based on algorithmic analysis, design personalized interventions for each investor.
These could include targeted reminders, prompts, or educational content to counteract specific Experimental
Testing: Implement the personalized debiasing strategies in an experimental setting involving a sample of online
investors. Compare the performance of investors who receive personalized interventions with those who receive
generic interventions or none at all.
Measurement of Effectiveness: Measure the effectiveness of personalized debiasing strategies by assessing

changes in investment behavior, trading frequency, and portfolio performance over a defined period.
Qualitative Insights: Collect qualitative insights through interviews or surveys to understand investors' perceptions
of the personalized interventions and their impact on decision-making.
Expected Contributions:
This research would contribute to the field by bridging the gap between behavioral biases and personalized
technological interventions. It could offer insights into how tailored debiasing strategies can be integrated into
online investment platforms to improve decision-making outcomes, potentially leading to more informed and
rational investment behaviors.
By addressing this research gap, your study would provide a novel perspective on the practical application of
technology in mitigating behavioral biases in the context of online investing.
Methodology
Method: Longitudinal Online Investor Behavior Study
Step 1: Participant Recruitment:

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Identify a sample of online investors from various online investment platforms, including retail investors, active
traders, and users of robo-advisory services.
Collaborate with online brokerage firms or robo-advisors to gain access to participants who consent to participate
in the study.
Step 2: Data Collection Tools:

Develop an online survey or data collection platform that participants can access through their investment
accounts or email invitations.
Include a mix of quantitative questions to measure behavioral biases and demographic information. Also, include
qualitative questions to gather insights into participants' experiences and decision-making processes.
Step 3: Quantitative Data Collection:

Behavioral Bias Assessment: Include validated scales or questions to measure specific behavioral biases such as
overconfidence, confirmation bias, herding behavior, and loss aversion.
Investment Behavior: Collect data on participants' trading frequency, portfolio turnover, asset allocation, and risk
tolerance.
Demographic Information: Gather information about participants' age, gender, education, income, and investment
experience.
Step 4: Qualitative Data Collection:

Open-Ended Questions: Include qualitative questions that encourage participants to o describe their investment
decision-making processes, factors influencing their choices, and their perceptions of biases.
Interviews: For a subset of participants, conduct in-depth interviews to delve deeper into their experiences, biases,
and how technology impacts their decision-making.
Step 5: Tracking Online Behavior:

Collaborate with online platforms to collect anonymized data on participants' interactions with the platform, such
as trading history, time spent on different sections, and clicks.
Use cookies or tracking mechanisms to monitor online behaviors and gather objective data on their interactions
with the platform.
Step 6: Ethical Considerations:

Ensure participant consent and confidentiality of data. Clearly communicate how their data will be used and assure
them of data privacy.
Obtain necessary ethical approvals from relevant institutions if required.
Step 7: Data Analysis:

Quantitative Analysis: Analyze quantitative data using statistical methods like regression analysis, correlation
analysis, and descriptive statistics to identify relationships between biases and investment behavior.
Qualitative Analysis: Conduct thematic analysis of qualitative responses to extract insights and patterns related to
biases, decision-making, and technology's impact.
Step 8: Integration with Objective Data:Cross-reference participants' self-reported biases and behaviors with
objective data collected from the online platform to validate and corroborate findings.
Step 9: Findings and Interpretation:

Present quantitative and qualitative findings separately, highlighting trends, correlations, and insights into the
impact of biases on online investment decisions.
Discuss how technology interfaces with biases and shapes investors' behavior on online platforms.
By adopting this longitudinal online investor behavior study method, you can collect comprehensive data that
provides insights into how behavioral biases manifest in online investment decisions and the role technology plays

61
in influencing these biases. This approach allows for a thorough exploration of both self-reported biases and
objective online behavior, leading to a deeper understanding of the complex relationship between biases and
online investing.
Case study on bias driven decision

Case Study: Overconfident Trading
Background:
John is a retail investor who has been trading stocks on an online investment platform for the past year. He has
experienced some successes, earning profits on a few trades. This initial success has fueled his confidence in his
trading abilities. John spends significant time reading financial news, follows stock market trends on social media,
and believes he has a good understanding of market dynamics.
The Bias: Overconfidence Bias

Overconfidence bias refers to the tendency of individuals to overestimate their knowledge, skills, and abilities,
leading them to make decisions based on an inflated sense of confidence. This bias often leads individuals to trade
excessively and take higher risks than they should.
Scenario:
One day, John comes across news about a newly emerging technology company. Many experts are predicting that
the company's stock will soar in the coming months due to its innovative products. John is convinced that he has
identified a golden opportunity. Ignoring the potential risks and potential for loss, he decides to invest a significant
portion of his portfolio in the company's stock.
Impact of Bias:
Due to his overconfidence bias, John is overly optimistic about the stock's potential gains. He underestimates the
risks associated with investing in a volatile, emerging market. His belief in his ability to predict market movements
leads him to disregard warnings about potential downturns.
Outcome:
Unfortunately, the market reacts negatively to some unforeseen regulatory challenges, causing the stock price of
the technology company to plummet. John's investment suffers significant losses, wiping out a substantial portion
of his portfolio. He is shocked and disheartened by the outcome, as he had been convinced that his trading prowess
would lead him to success.
Mitigation:
To mitigate overconfidence bias, investors like John could benefit from:
Self-awareness: Recognizing that biases exist and being open to critically evaluating decisions.
Diversification: Spreading investments across different assets to reduce exposure to individual stock risks.
Seeking Advice: Consulting with financial advisors who can provide objective insights and help counteract
overconfidence.
This case study underscores the real-world impact of behavioral biases on decision-making and the importance of
self-awareness and balanced reasoning in the investment process.
Reflection:
John's experience highlights how overconfidence bias can lead to poor decision-making and financial losses. His
overestimation of his abilities prevented him from critically evaluating the risks involved in his investment. The
allure of quick gains and his self-assuredness blinded him to the importance of diversification and
prudent risk management.
Investor Education and Awareness

Providing investors with education and raising awareness of common behavioral biases is crucial for promoting
long-term financial well-being. Online platforms can play a meaningful role in disseminating this type of
important information on a large scale.
When making investment decisions, biases like overconfidence, herding, and loss aversion can negatively impact
judgment. Investors may buy and sell at inopportune times or take undue risks due to cognitive shortcuts.

62
Education helps counteract these biases by fostering a deeper understanding of rational decision-making
processes.
Online platforms are well-suited to efficiently share educational content with broad audiences. Tutorials, courses,
and bite-sized lessons delivered through websites and apps make complex topics more accessible and engaging.
Integrating social elements allows users to learn from each other's experiences. Standardized materials ensure
consistent messaging across demographics.
However, simply providing information may not be enough to change behaviors ingrained over many decisions.
Platforms could supplement education with nudges and default settings aimed at encouraging wiser choices. Small
prompts or preselected investment options aligned with long-term goals may produce better outcomes than full-
control interfaces.
Promoting investor awareness and education is an ongoing challenge but one with massive potential returns. If
done effectively and at scale through digital means, it could help many savers achieve sound financial habits and
realize their objectives. Overall financial wellness will be enhanced as biases are recognized and rational planning
is emphasized.
However, changing investing behaviors and thought processes poses challenges. Biases are often deeply ingrained
due to psychological and emotional factors. While awareness of biases’ existence is a start, internalizing strategies
to overcome them requires sustained effort. Online methods must creatively convey complex ideas simply and
engage users through interactive elements to facilitate learning. Ongoing assessment also helps optimize content
and measure impact. Collaboration across stakeholders can multiply results through coordinated campaigns.
Regulatory and ethical considerations, ethical responsibilities of online investment platforms, regulatory
framework addressing bias related issues, balancing innovation with investor protection.
Online investment platforms operate within a regulatory framework that aims to address bias-related issues and
balance innovation with investor protection. These platforms have ethical responsibilities to ensure transparency,
fair treatment, and accurate information for investors. Regulatory authorities monitor compliance to prevent
discriminatory practices and maintain market integrity. Striking the right balance between innovation and investor
protection involves continuous adaptation to evolving technologies while upholding ethical standards and
regulatory requirements.
These platforms have ethical responsibilities to ensure transparency, fair treatment of investors, and protection
against potential biases. The regulatory framework must address bias-related issues to maintain trust and fairness.
Balancing innovation with investor protection involves finding ways to foster technological advancements while
upholding the highest standards of accountability and safeguarding investors' interests.
Regulatory bodies have increasingly focused on responsible innovation in the financial sector. Online investment
platforms automate many processes but also bring new responsibilities. While technology can expand access, it
must uphold important ethical standards.
Platforms have a duty to consider all investors fairly regardless of personal attributes. Recent studies show
algorithmic decisions can inherit and even amplify biases if not designed and tested carefully. As gatekeepers to
the market, platforms must ensure their tools do not disadvantage any group of lawful investors. Transparency
into how decisions are made helps address potential issues and maintain public trust.
When looking to invest your hard-earned money, it's important to choose an online platform that offers
security, low costs, and good customer service. Here are a few top options to consider
Fidelity Investments is a well-established name in the industry, offering investors an impressive array of
investment choices including stocks, ETFs, mutual funds and more. Commission fees are very reasonable
depending on your trading activity. The platform is easy to navigate with robust research and portfolio tracking
tools. Customer service is available 24/7 via various channels.
Vanguard is renowned for its low-cost index funds, making it ideal for buy-and-hold investors. ETF and mutual
fund expenses are among the lowest around. You won't pay commissions to buy or sell Vanguard funds either.

63
The website could use a more modern design, but it gets the job done. Customer service is responsive by phone
and online.
Schwab stands out for having no account minimums or commission fees for online trades of stocks and ETFs.
The platform offers extensive education and investment ideas. Advanced traders will appreciate low-cost options
and futures trades plus an active desktop platform. Robust customer service is available whenever you need help.
For well-rounded online investment options at competitive prices, consider trying Fidelity, Vanguard or Schwab.
Whichever you choose, do your research to find the best fit based on your investment style and needs.
Online investment platforms have become a popular way for individuals to manage their portfolios. When
designing these systems, it is important to consider how to minimize cognitive and emotional biases that can
undermine good financial decision making. Some practical suggestions include:
Present unbiased, factual information about investment options without emphasizing potential gains over risks.
Clearly disclose all applicable fees upfront so users can easily compare total costs. The default view of one's
portfolio should focus on long term performance and asset allocation rather than short term fluctuations which
can trigger reactive decisions.
Nudge users to rebalance regularly through gentle reminders rather than urgent warnings. Behavioral insights
show automatic resets to target allocations help maintain discipline. Provide easy-to-understand comparisons of
past returns between asset classes so recency bias does not skew preferences only toward what has recently
performed well.
Simple, intuitive user interfaces and clear explanations of concepts like compound interest can help less
experienced investors feel confident managing their money for the long run. Flexible savings goals and retirement
projections grounded in realistic assumptions discourage unrealistic expectations that may lead to chasing returns.
Overall, the goal should be to design platforms that facilitate informed, objective decisions by addressing inherent
cognitive limitations, rather than exploit them for commercial gain. A user-centered approach grounded in
behavioral insights can help online investing platforms fulfill their potential to make financial independence more
accessible for more people.
CONCLUSION
In conclusion, while online platforms present many opportunities, it is crucial for investors to recognize how
personal biases can negatively impact investment decisions regarding such companies. Relying solely on
popularity, hype or personal preferences risks overlooking important financial fundamentals. A thorough and
objective analysis of business models, markets, competition as well as macroeconomic factors is necessary to
make well-informed choices.
Investors should carefully research platforms from multiple perspectives rather than make assumptions. Financial
projections deserve close examination to separate realistic prospects from unrealistic valuations. Diversity in
sources of information and varying opinions can counteract subjective views. Maintaining an open yet prudent
mindset regarding both risks and rewards will serve investors well when assessing options within the rapidly
changing digital economy.
Overall, online platforms showcase innovation and growth potential. But the key is evaluating company and
investment merits with discipline, rigor and impartiality. Being aware of personal tendencies that could cloud
judgment empowers investors to base decisions on factual analysis instead of preconceptions. This level-headed
approach stands to benefit portfolio returns in both the short and long term.
While online platforms provide new opportunities for investment, it is crucial investors are aware of and account
for personal biases that can undermine sound financial decision making. Anchoring bias, for example, causes
investors to rely too heavily on the initial information they receive. This can lead them to ignore later, more
relevant data that may contradict early assumptions. Additionally, confirmation bias involves searching for or
interpreting information in a way that confirms preexisting beliefs. Investors must make conscious efforts to seek
out disconfirming evidence rather than just information supporting their views.
It is also important to recognize emotional biases like overconfidence. Investors may feel overoptimistic about
their ability to pick winning investments and ignore risks, particularly for platforms they are personally excited

64
about using. To counter this, thorough research from multiple independent sources can provide a more objective
view of risks and opportunities. Overall, acknowledging the many cognitive and emotional biases we all hold as
humans is the first step to making investment choices based on facts rather than feelings. With awareness and
discipline, investors can harness the power of online platforms while avoiding pitfalls stemming from subjective
influences. In an evolving digital landscape, maintaining an open and inquisitive mindset is key to long-term
investment success.

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Journal DOI: 10.36713/epra1013|SJIF Impact Factor (2023): 8.

048 ISSN: 2347-4378

BEHAVIORAL BIASES IN ONLINE INVESTMENT

Ananta Dutta, Navya Achan

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

BEHAVIORAL BIASES IN INVESTMENT DECISION MAKING

Online Investment Platform

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

Key Finding and Trends

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

Potential Research Approach:

Measurement of Effectiveness: Measure the effectiveness of personalized debiasing strategies by assessing

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

Step 2: Data Collection Tools:

Step 3: Quantitative Data Collection:

Step 4: Qualitative Data Collection:

Step 5: Tracking Online Behavior:

Step 6: Ethical Considerations:

Obtain necessary ethical approvals from relevant institutions if required.

Step 7: Data Analysis:

Step 9: Findings and Interpretation:

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

Case study on bias driven decision

The Bias: Overconfidence Bias

Investor Education and Awareness

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

2023 EPRA EBMS | https://eprajournals.com/ Journal DOI URL: https://doi.org/10.36713/epra1013

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