Behavioral Biases In Investment Decision Making: Evidence From Islamabad’s Real Estate Market
Author: Muhammad Abubakr

This research has been conducted to gauge the presence of behavioral biases in investment decision making in Islamabad’s real estate market. The majority of traditional theories of finance have the underlying assumption that individuals behave rationally when investing and their objective is to maximize their utility. However, behavioral finance differs from the idea of flawless rationality and claims that behavioral aspects have their effect on investment decision making. A primary survey has been used to gather responses using a purposive sampling technique. The impact of three biases that is the disposition, herding, and overconfidence have been tested concerning the investment decisions of Islamabad’s real estate investors. Exploratory factor analysis, sample average method and multiple regression are used and the results show a strong presence and impact of these psychological biases in investment decision making. This thesis will be useful for real estate consultants in understanding and properly guiding their clients. Supervisor:- Dr. Farhat Mahmood

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Supervisor: Farhat Mahmood

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