Advances in Consumer Research
Issue 2 : 904-910
Original Article
Behavioral Finance and Business Management: Understanding Decision-Making Biases
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1
Assistant Professor, Tirpude Institute of Management Education, Nagpur
2
Professor, Tirpude Institute of Management Education.
3
Associate Professor, Dr. Ambedkar Institute of Management Studies and Research.
4
Assistant Professor, Dr. Ambedkar Institute of Management Studies and Research.
Abstract

Behavioral finance is a theory that opposes rationality by considering psychological factors as influencing investment and strategic decisions. This empirical investigation seeks to establish the effects of overconfidence, belief, regret, and the snakebite effect on business decisions. The analysis of the data of 120 respondents shows that all types of biases influence decisions, and the highest effect is the “snakebite” effect when using multiple linear regression. These outcomes indicate the necessity of avoiding biases in the management of businesses to enhance the risks and strategic plans assessment. In the end, the study encourages for the development of frameworks that will ensure that biases are deemphasized and that rationality takes precedence.

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