The Influence of Behavioural Factor on Retail Investors Decision Making in IPO Investment

Abstract

This study explains about the influence of behavioural factors on retail investors in decision-making processes when considering the investments in Initial Public Offerings (IPOs). IPOs represent an attracting investment opportunity for the retail investors, often they are characterized by significant up-and-downs and uncertainty. Understanding the psychological factors for guiding investors decisions in this factor is crucial for both investors and the market regulators. Outlining over the behavioural finance theories and the actual evidence, this research explores various psychological biases and emotional influences that may affect the retail investors during the IPO investment decision-making. psychological biases such as overconfidence, group behaviour, and loosing, along with the emotional factors like fear of missing out (FOMO) and loss aversion, are analyzed in the factors of IPO investments. Here the methodology involves a combination of quantitative analysis, utilizing survey data from the retail investors, and the qualitative examination of
relevant literature and case studies. By analyzing the behavioural factors influencing the IPO investment decisions this research study intends to give understandings right nto the primary mechanisms driving retail investors behaviour in IPO markets.