DIP: 18.02.026/20251003 
DOI: 10.25215/2455/1003026 
Abstract
Cognitive biases significantly influence financial decision-making by altering perceptions, distorting risk assessments, and leading to suboptimal investment outcomes. These psychological tendencies deviate from rationality, causing investors to rely on heuristics or mental shortcuts, often resulting in errors in judgment. Common biases such as overconfidence, anchoring, loss aversion, herd behavior, and confirmation bias affect how individuals evaluate financial information and make investment choices. Behavioral finance integrates insights from cognitive psychology and traditional economics to explain these anomalies. The presence of cognitive biases can lead to market inefficiencies, mispricing of assets, and irrational trading behavior. Recognizing and understanding these biases is crucial for both individual investors and financial institutions to mitigate their adverse effects and enhance decision-making strategies. Recent research also highlights the role of education, digital tools, and regulatory frameworks in helping investors become more aware of their biases and make more informed, rational financial decisions.
The author(s) appreciates all those who participated in the study and helped to facilitate the research process. 
The author(s) declared no conflict of interest. 
ISSN 2455-670X