Understanding Investment Behaviour: A Review of Cognitive, Emotional, and Social Biases

Abstract

Behavioural finance has emerged as an important field of inquiry, offering deeper insights into the ways psychological factors influence investment decisions beyond traditional financial theories. This study seeks to develop a comprehensive understanding of behavioural biases by systematically reviewing existing literature on cognitive, emotional, and social influences shaping investor behaviour. Adopting a structured review methodology, the paper synthesizes key empirical findings, identifies recurring patterns and inconsistencies, and highlights critical gaps within the current body of research. The review further outlines potential directions for future studies aimed at strengthening theoretical and practical understanding in this domain. By enriching the discourse on investor psychology, the findings of this study provide meaningful implications for academics, financial practitioners, and policymakers seeking to design more informed investment strategies and regulatory frameworks. (Rewritten for better academic presentation)