Title: Herd mentality in investment decision making: an empirical study mediated through emotional and psychological aspects

Authors: Nonika; Arpan Parashar; Peeyush Bangur; Richa Chauhan

Addresses: Department of Commerce and Management, Banasthali Vidyapith, Rajasthan, 304022, India ' Department of Commerce and Management, Banasthali Vidyapith, Rajasthan, 304022, India ' Institute of Management Studies, Devi Ahilya Vishwavidyalaya, Indore, MP, 452001, India ' Jaypee Institute of Information Technology, Jaypee Business School, Noida, Uttar Pradesh, 201309, India

Abstract: The aim of the study is to identify the type of herd mentality exhibited by the Indian investors and its impact on their investment journey mediated through the emotional and psychological aspects. The study is a quantitative analysis of Indian investors belonging to middle-class families. 390 primary datasets were collected, and questions about herd mentality behaviour were asked. The investigation includes the role of the investors' perceived emotional and psychological levels as a mediator. The results show a significant impact of herd mentality behaviour on the investment satisfaction derived by Indian investors. The herd mentality in Indian investors differs based on demographics, including gender, age group, marital status, education level, type of capital market they invest in, and the type of product these investors prefer to buy. The role of an investor's emotional and psychological being is of a partial mediator. The study is a novel attempt to understand the middle-class family-specific Indian investor's herd mentality behaviour.

Keywords: herd mentality; behaviour; biases; investment; investment decision making; psychology.

DOI: 10.1504/IJBAF.2025.150271

International Journal of Behavioural Accounting and Finance, 2025 Vol.7 No.4, pp.463 - 479

Received: 19 Apr 2025
Accepted: 24 Jun 2025
Published online: 05 Dec 2025 *

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