AMMARA SARWAR , FATIMA SULTANA , YASSIR MAHMOOD , SANA NAZ ,UM-E-HABIBA , SUMAIRA SHAMOON , AREEBA EMAN
DOI: https://doi.org/This study paper investigated how the adoption of technology moderates the relationship between behavioral biases and investment decision-making among the Pakistani investors. In the literature of behavioral finance, cognition biases like overconfidence, confirmation bias, herding and loss aversion have repeatedly been cited as factors that affect investor behavior. However, in developing economies that are undergoing a digital transformation and redefining the nature of investments, there is little understanding of whether these biases can be reduced or enhanced due to the use of technology. A quantitative and cross-sectional design was used to gather data on 380 active investors and brokers in the Pakistan Stock Exchange (PSX). The level of measurement and structure model were evaluated using Structural Equation Modeling (SEM) using Smart PLS 4. Findings show that behavioral biases have significant influence on investment decisions and overconfidence and herding have the most significant impacts. In addition, the use of technology moderates these associations, the detrimental effect of overconfidence and loss aversion, and the beneficial effect of confirmation biases on the quality of decisions. This research adds to the behavioral finance literature by considering technology adoption as a conditioning constraint to the Pakistani setting and providing new information to regulators, brokerage firms, and fin-tech solutions. Implications have identified the necessity of investor education, digital literacy, and regulatory protection to exploit technology as a corrective factor in financial decision-making.
