Behavioral Finance Biases in Corporate Governance (Subtitle: Repercussion of Behavioral Finance in Investment Decision Making)

ABSTRACT The main goals of the study is to assess the influence of different behavioural biases when it comes to making investment decisions among different classes of employees and students in the emerging markets. This study is based on a survey accomplished by distributing an online questionnaire and gathering the data from the respondents about their own views of behavioural biases in their daily activities in the emerging markets. The online questionnaire was spread between the sample size of 314 respondents from which 64.3% were employees while 35.7% were students and out of the sample 67.8%were males and 32.2% were females. During the study I used two statistical techniques analyse the gathered data from the respondents. First, I demonstrated the Pearson Chi-square test in order to determine the significant difference between gender and overconfidence bias. As a result, I conclude that there is no significant difference between gender and overconfidence bias when it comes to investment decision making. Second, I show the Pearson correlation as to analyse the relationship between overconfidence bias with the other such as the illusion of control bias, optimism bias, confirmation bias and the familiarity bias. Thus, the outcome of the study reports that there is a weak negative correlation between other biases and overconfidence bias considered above when it comes to investment decision making.