Effect Of Past Behavioral Biases On Investment Decision Of Investors: An Extension Of The Theory Of Planned Behavior Model
DOI:
https://doi.org/10.69980/7qfbex39Keywords:
TPB, Investors, Attitude, Subjective Norms, Perceived Behavioral Control, Past Behavior, JEL Classification: G10, G11, G40, G41Abstract
Purpose: The purpose of this research is to identify the factors that influence Investors' decision-making process. Individual investor incentives have been investigated using the TPB model of the Theory of Planned Behavior. There are three factors that go into TPB: one's attitude, another's subjective norms, and one's sense of agency over their own behavior. In this study, TPB model have been extended by adding one more variable that is Past Behavior (PB).
Design/Methodology: A total 105 respondents were given response to Structured Questionnaire. To analyze and evaluate the data set of respondents, both descriptive and inferential analysis was performed in study. Descriptive analysis was performed using SPSS 20.0, and inferential analysis using Structured Equation Modeling (SEM) was performed in AMOS 20.0.
Findings: According to the results of this research, AT, SN, and PB all had a considerable impact on individual investors' intents, but PBC had no effect. Overall, study suggest that Financial professionals, policymakers and other stakeholders should consider the importance of investors’ AT, SN and PB when designing interventions or strategies to influence investors’ intentions. While PBC may not have a direct impact intentions based on the current findings.
Originality: This study contributes to the behavioral finance literature by extending the Theory of Planned Behavior (TPB) through the incorporation of Past Behavior (PB) as an additional explanatory variable in the context of individual investors’ decision-making. This extension of TPB enhances its predictive power and offers practical insights for financial professionals and policymakers seeking to design more behaviorally informed investment strategies.
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