Impact of Overconfidence on Investor’s Investment Decision: Moderating Role of Risk Perception and Religiosity-A Survey of Pakistan Stock Exchange

Abstract

The principal objective of the study is to find out the impact of overconfidence on investor’s investment decisions and to know whether risk perception and religiosity moderately affect the relationship between the overconfidence and investor’s investment decision. Data is collected through a well-structured questionnaire. Systematic sampling is used, and the sample size is 156. Statistical results indicate a significant impact of overconfidence on investor’s investment decisions. For the moderating part of the model, however, there is no empirical evidence of religiosity and risk perception as a moderating effect. Thus, the study depicts that there is an impact of overconfidence on investor’s investment decisions, but there is no moderating impact of religiosity & risk perception. The review is useful for the brokers, investors in making decisions regarding the buying and selling of stocks, and also for entrepreneurs. This study is also exclusive and has greater importance as the role of religiosity and risk perception does not imply together before in the Pakistani stock market. The current research is also constructive for the scholars to further study the impact in a different context with further modified variables.

Keywords

• Overconfidence
• Risk perception
• Religiosity
• Pakistan stock Exchange