Exploring Behavioral Biases in Investment Decisions: Insights from a CIMO-Based Systematic Literature Review

Abstract

This study aims to identify and analyze behavioral biases that influence investors in their financial decision-making. The research approach employs a Systematic Literature Review (SLR) using the CIMO-Logic framework (Context, Intervention, Mechanism, and Outcome). The scope of the study covers a 21-year period (2004–2024) to evaluate research trends, methodologies, and gaps, with 410 selected articles obtained from Publish or Perish, Google Scholar, and ScienceDirect. The findings indicate that behavioral finance is influenced by economic factors, individual psychology, market information, and social interactions. The results indicate that previous research has been dominated by topics such as herding, overconfidence, mood, and heuristics, while topics such as self-attribution, gender, the illusion of control, investor personality, information transparency, social media, and experimental behavior remain relatively limited. The contributions of this study support the continued development of the field of finance by providing empirical evidence on the behavioral factors influencing investment decision-making. Theoretically, this study builds upon previous research related to the psychological and behavioral aspects of investing in explaining investor behavior within the framework of modern financial theory. In practical terms, this study provides in-depth insights for investors, policymakers, regulatory authorities, and financial institutions in designing intervention measures, educational programs, and regulatory frameworks aimed at reducing behavioral biases and promoting more rational and efficient investment decision making.