Research: Identifying and Quantifying Behavioural Biases in Retail Investor Trading Usi...

Research question: How do behavioural biases manifest in retail investor trading patterns as observed through detailed brokerage transaction data?

Background & Motivation: Retail investors are increasingly active in financial markets, particularly through online brokerage platforms. Their trading behaviour often deviates from rational models, influenced by psychological biases such as overconfidence, disposition effect, and herd behaviour.

Research Gap / Question: While behavioural finance has extensively studied investor biases via surveys and experiments, there is limited empirical evidence using granular brokerage transaction data. This project seeks to systematically identify and quantify the prevalence of key behavioural biases in real-world trading patterns.

Approach & Expected Contribution: By analysing anonymized brokerage transaction datasets, the study will apply statistical and econometric methods to detect and measure behavioural biases. Hypotheses will be developed based on existing literature and tested using robust methodology, controlling for market conditions and demographic differences.

Importance: Understanding these biases is crucial for improving investor education, designing better financial products, and informing regulatory policy. The findings can lead to more effective interventions to mitigate harmful investor behaviours and enhance market efficiency.