Abstract:
Behavioral finance is concerned with the influence of various factors on investor behavior. Behavioral finance investigates the effects of various economic, psychological and demographic factors on investor decision making. The nature and significance of these variables on investor behavior can be different and interesting in various countries. This study therefore examines the influence of economic, and behavioral, factors in shaping the investment behavior of individual equity investors in Pakistan. The factor includes classical wealth maximization, accounting information, self-image/firm-image coincidence, neutral information, advocate recommendation and personal financial needs. The study found strong influence of self-image/firm-image coincidence, neutral information, and advocate recommendation on individual equity investor decision making. Whereas, no influences of factors like classic wealth maximization, accounting information and personal financial needs is found on individual equity investor’s decision making in the context of Pakistan.
