Heuristics bias: The shortcut that misleads in financial decision-making

Abstract

This research aims to determine whether heuristics bias mislead financial decision into more accurate ones or not among individuals in Uttar Pradesh. Utilizing a sample size of 60 participants, this study investigates the impact of heuristic biases on financial decision-making, with a particular focus on overconfidence, anchoring, availability, representativeness, and gambler fallacy bias. By analysing the ways these biases shape financial choices, the research highlights how individuals often depend on mental shortcuts instead of thorough, systematic analysis. Findings reveal that reliance on these heuristics frequently results in suboptimal investment decisions, increased risk misjudgement, and market inefficiencies. The study identifies distinct behavioural tendencies—such as preference for recent information, pattern recognition, and confirmation of existing beliefs—that drive investors to bypass comprehensive evaluation in favour of quick judgments. Ultimately, this research will contribute to a deeper understanding of investors behaviour in the contemporary financial landscape.