Herd mentality in investment decision making: an empirical study mediated through emotional and psychological aspects

Nonika, Arpan Parashar, Peeyush Bangur and Richa Chauhan

International Journal of Behavioural Accounting and Finance, 2025, vol. 7, issue 4, 463-479

Abstract: The aim of the study is to identify the type of herd mentality exhibited by the Indian investors and its impact on their investment journey mediated through the emotional and psychological aspects. The study is a quantitative analysis of Indian investors belonging to middle-class families. 390 primary datasets were collected, and questions about herd mentality behaviour were asked. The investigation includes the role of the investors' perceived emotional and psychological levels as a mediator. The results show a significant impact of herd mentality behaviour on the investment satisfaction derived by Indian investors. The herd mentality in Indian investors differs based on demographics, including gender, age group, marital status, education level, type of capital market they invest in, and the type of product these investors prefer to buy. The role of an investor's emotional and psychological being is of a partial mediator. The study is a novel attempt to understand the middle-class family-specific Indian investor's herd mentality behaviour.

Keywords: herd mentality; behaviour; biases; investment; investment decision making; psychology. (search for similar items in EconPapers)
Date: 2025
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