The study explores how neurofinance factors influence investment decisions in the Indian stock market. Conventional finance theories, which assume rational investor behavior, often fail to explain the emotional and psychological deviations visible in actual market behavior. Drawing upon secondary data from peer-reviewed literature, this review examines key Neurofinance dimensions loss aversion, overconfidence, herd behavior, and emotional arousal and interprets their manifestations in the Indian context. Findings indicate that growing retail participation, digital trading platforms, and social media exposure have amplified cognitive and emotional biases among Indian investors. The paper concludes that understanding Neurofinance dynamics offers valuable guidance for investors, regulators, and intermediaries in creating more stable, rational investment environments.
W. et al. (Thu,) studied this question.
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