Date Added: Mar 2011
Expected utility theory views the individual investment decision as a tradeoff between immediate consumption and deferred consumption. But individuals do not always prefer according to the classical theory of economics. Recent studies on individual investor behavior have shown that they do not act in a rational manner, rather several factors influences their investment decisions in stock market. The present paper considers this theory of irrationality of individual investors and investigates into their behavior relating to investment decisions. The authors examine whether some psychological and contextual factors affect individual investor behavior and if yes which factors influences most.