Behavioral biases affecting investment decisions of capital market investors in Bangladesh: A behavioral finance approach

The aim of this paper is to identify the behavioral and psychologic biases that may affect investment decisions individual investors in Bangladesh. This study considered anomalies such as Cognitive Dissonance, Regret Aversion, Loss Overconfidence, Hindsight, Illusion Control, Herd instinct, Self-attribution Representativeness, analyzed how significantly each these would prevail by preventing from making rational when investing. research has been developed through a structured questionnaire analyzing survey results collected 196 involved Dhaka Stock Exchange. Factor analysis on approach was conducted analyze responses. outcome reveals are not rational, there significant impact different biases, particularly cognitive dissonance (0.8005), regret aversion (0.7793), loss (0.7418) illusion control (0.7260) Moreover, most influential four factors extracted jointly can explain 55.63% variance variables. Finally, factor loading values show all nine hypotheses be rejected, which makes it clear designated psychological exist decision DSE investors.