Behavioral Finance and Consumer Decision-Making in Investment Products.

Abstract

This thesis explores how behavioral finance principles influence individual investment decisions, challenging the traditional notion that investors are fully rational. It highlights the impact of psychological biases such as loss aversion, overconfidence, mental accounting, and herd behavior on consumer preferences for products like mutual funds, SIPs, insurance, and stocks.

The study is based on primary data collected from 50 digitally active young Indian investors (mainly aged 18–35), who are increasingly turning to digital media and social networks for investment advice. Results show that emotional and social triggers, rather than purely logical analysis, often guide investment behavior.