Impact of Overconfidence Bias on Investor’s Investment Decisions: the moderating role of Religiosity

Abstract

This study examined the level of psychological factors (overconfidence) that affect investor decision-making processes. The main purpose of the current study is to explore the impact of psychological factors on investor decision-making. To achieve this goal, this study used measurement and design of a separate study. Research Survey has been used to collect data. Questionnaires are still being distributed to individual investors and stockholders in Pakistan. Smart PLS-SEM 3 was used for data analysis. It has been found that overconfidence has a major impact on investor investment decisions. In addition, it is investigated that religiosity has a significant and positive impact on investors’ investment decisions. Moreover, it is also found that overconfidence has a positive and significant impact on investors’ decisions with the moderating role of religiosity. In particular, the current study participated in investigating the moderating impact between overconfidence bias and decision-making by investors. The findings of the present study may be very important in gaining a better understanding of investor behavior and may apply to academics and practitioners.