Loss aversion ↔ investment decision-making

Relations (1)

related 2.58 — strongly supporting 5 facts

Loss aversion is a behavioral bias that significantly influences investment decision-making, as evidenced by academic studies exploring its impact on investor behavior [1], [2], and [3]. Furthermore, loss aversion can lead to suboptimal investment outcomes, such as the irrational retention of declining assets [4], and is frequently analyzed alongside other biases like anchoring and herding in financial research [5].

Facts (5)

Sources

Examining Behavioural Aspects of Financial Decision Making - OUCI ouci.dntb.gov.ua C. Gautam, R. Wadhwa, T. V. Raman · Financial University under the Government of the Russian Federation 3 facts

referenceThe study by H. Srivastava, S. Moid, and N. J. Rushdi, published in 'Finance: Theory and Practice' (2024, № 4, p. 33-45), investigates the impact of anchoring, herding, and loss aversion on the investment decision-making of 196 working women investors in the Indian Stock Market (Uttar Pradesh, India).

claimIn a study published in Finance: Theory and Practice (2025), researchers H. L. Do, T.M. P. Vu, V. G. Nguyen, N. M. Vu, D. T. Nguyen, and T. V. Tran concluded that anchoring has the most influence on the investment decisions of working women investors, followed by herding, while loss aversion has the least influence.

measurementThe study by H. Srivastava et al. (2024) confirmed that anchoring, herding, and loss aversion bias have a significant positive impact on the investment decision-making of working women investors in the Indian Stock Market.

Biases in Behavioral Finance - World Scholars Review worldscholarsreview.org Daria Azhyshcheva, Vi Dinh, Aanya Gothal, Abhinav Sisodiya · World Scholars Review 1 fact

referenceKhan (2017) authored 'Impact of Availability Bias and Loss Aversion Bias on Investment Decision Making, Moderating Role of Risk Perception', which explores how availability bias and loss aversion affect investment decisions, with risk perception acting as a moderator.

The Psychology Behind Financial Choices: The Role of Cognitive ... tutoring.hsa.net Satvik Agarwal · HSA Tutoring 1 fact

claimLoss aversion can lead to poor investment decisions, such as holding onto stocks that are losing value or avoiding lucrative investments due to the fear of potential losses.