Gauging heuristics through mediation of risk perception and moderation of robo-advisor at Pakistan Stock Exchange in investment decision making

This study examines how behavioral heuristics influence investment decision-making of retail investors in Pakistan at Pakistan Stock Exchange specifically the moderating effect of Robo-Advisors and the mediating effect of the risk perception. Findings indicate that the availability heuristic, price anchoring heuristic, and the representative heuristic have a positive role in investment decision rather than the loss averse heuristic, which does not have a significant impact. When modeled as a higher-order construct, heuristics demonstrate a significant positive relationship with investment decision-making. The findings suggest that robo-advisory usage may moderate the relationship between heuristics and investment decision-making, and it is therefore possible to assume that it may influence heuristic-driven decision tendencies. Also, the influence of heuristics on investment decisions flows through risk perception implying that the findings contribute to behavioral finance literature by clarifying how heuristic tendencies influence investment decision-making through perceived risk. The study offers practical insights for financial institutions regarding the potential role of digital advisory technologies in investor decision support.