Behavioral Biases in Personal Financial Decision-Making: Evidence from Generational Cohorts in Bengaluru, India

A Charles Ambrose; K Alex

doi:10.36948/ijfmr.2026.v08i01.67856

Behavioral Biases in Personal Financial Decision-Making: Evidence from Generational Cohorts in Bengaluru, India

Author(s)	Mr. A Charles Ambrose, Dr. K Alex
Country	India
Abstract	This study explores how behavioral biases influence personal financial decision-making among different generational cohorts in the urban context of Bengaluru, India. With rapid digitalization and the proliferation of financial technology services, understanding generational distinctions in financial behavior has become increasingly important for policymakers and service providers. A structured survey was administered to a sample of 400 residents, equally representing four generational cohorts—generation z, millennials, generation x, and baby boomers. The survey measured the prevalence and intensity of five prominent behavioral biases: loss aversion, overconfidence, anchoring bias, herding behavior, and mental accounting. One-way Anova tests were conducted using spss to compare the mean scores of each bias across the four cohorts. The findings reveal statistically significant generational differences across all five types of biases, with herding behavior demonstrating the most pronounced variation. Furthermore, the results indicate a clear, monotonic increase in loss aversion with age, suggesting that older generations are more sensitive to financial losses compared to younger cohorts. In contrast, overconfidence was found to be highest among generation z and millennials, implying a greater propensity toward risk-taking among younger individuals. Anchoring, herding, and mental accounting also varied significantly by generation, underlining the multifaceted nature of bias-driven financial behavior. Overall, the statistical evidence demonstrates that generational cohort membership is a significant predictor of behavioral bias intensity. These insights hold important implications for the design of targeted financial literacy initiatives and the development of age-sensitive financial products and services in Bengaluru—widely recognized as India’s emerging financial technology hub.
Keywords	Behavioral finance, generational cohorts, overconfidence bias, loss aversion, personal finance.
Field	Sociology > Banking / Finance
Published In	Volume 8, Issue 1, January-February 2026
Published On	2026-02-05
DOI	https://doi.org/10.36948/ijfmr.2026.v08i01.67856

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Behavioral Biases in Personal Financial Decision-Making: Evidence from Generational Cohorts in Bengaluru, India

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