The Impact of Cognitive Biases on Retail Investor Decisions During Market Volatility: A Behavioural Finance Study

Author(s)	Aashriya Mehar Singh
Country	India
Abstract	This study explores how cognitive biases affect retail investor decision-making during periods of market volatility. As digital platforms democratize access to financial markets, emotionally driven retail investors have become key market participants. The research identifies major cognitive biases, such as overconfidence, herding, and loss aversion, that distort rational judgment. It examines how these biases intensify under volatile conditions, often leading to suboptimal investment decisions. By contrasting retail with institutional investor behavior, the study highlights gaps in experience and resources. The paper also discusses the influence of social media and proposes strategies to mitigate bias-driven decisions through education, platform design, and policy interventions.
Keywords	Retail, Investor, Financial
Field	Business Administration
Published In	Volume 7, Issue 5, September-October 2025
Published On	2025-09-05
DOI	https://doi.org/10.36948/ijfmr.2025.v07i05.54519

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