IDEAS home Printed from https://ideas.repec.org/a/daw/ijsrmt/v4y2025i8p109-117id751.html
   My bibliography  Save this article

Behavioral Economics in Strategic Investment Decision-Making: A Critical Review

Author

Listed:
  • Elena Georgiou

Abstract

Behavioral economics has nowadays become an important framework to understand decision-making processes underlying investment strategies. The present critical review hereby assesses how behavioral economics impacts the strategic decision of investment by highlighting psychological biases and heuristics caused by which the investor allocates capital. While traditional economic model of decision-making depicts investment decisions as being rational, behavioral economics states that cognitive biases like overconfidence, aversion to loss, and anchoring can affect them. Through review of previous works on investor behavior, the study looks into how these biases affect individual and institutional investors toward making subpar investment choices and creating inefficiencies in the market. This study further considers how behavioral economics can be employed to improve investment decision strategies and better financial outcomes. This work proceeds to expand the understanding of the psychological factors that influence strategic investment decisions and sets a foundation for future in- depth research into behavioral finance.

Suggested Citation

  • Elena Georgiou, 2025. "Behavioral Economics in Strategic Investment Decision-Making: A Critical Review," International Journal of Scientific Research and Modern Technology, Prasu Publications, vol. 4(8), pages 109-117.
    • Handle: RePEc:daw:ijsrmt:v:4:y:2025:i:8:p:109-117:id:751
    as

    Download full text from publisher

    File URL: https://www.ijsrmt.com/index.php/ijsrmt/article/view/751
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:daw:ijsrmt:v:4:y:2025:i:8:p:109-117:id:751. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rahul Goyal (email available below). General contact details of provider: https://ijsrmt.com/index.php/ijsrmt/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.