Each bias has a different origin in evolutionary psychology — and a different trigger in Indian financial markets. We test all 8 with realistic ₹-denominated scenarios from real Indian market events.
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Loss Aversion
Losses feel 2–2.5× more painful than equal gains feel good. Root cause of panic-selling and the Disposition Effect.
Kahneman & Tversky, 1979 · Prospect Theory
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Herd Mentality
Following the crowd feels safe — but herds run off cliffs. 2018 mid-cap mania, WhatsApp tips, neighbour's SIP.
Information Cascade Theory · Bikhchandani, 1992
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Anchoring Bias
Stuck to your purchase price. "I'll sell when it gets back to ₹500." That number has no bearing on future value.
Tversky & Kahneman, 1974 · Heuristics & Biases
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FOMO Investing
Chasing last year's top fund. Recency bias makes recent returns feel like a reliable forecast. They aren't.
Availability Heuristic · Recency Bias
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Confirmation Bias
Seeking news that confirms what you believe about a stock. Ignoring every red flag in your conviction bets.
Wason, 1960 · Confirmation Hypothesis Testing
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Overconfidence
Believing your picks will beat the market. SEBI data: 95% of active traders underperform the index net of all costs.
Dunning-Kruger Effect · Planning Fallacy
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Mental Accounting
Treating "bonus money" differently from salary. All rupees are fungible — but your brain creates separate buckets.
Thaler, 1985 · Mental Accounting Theory
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Sunk Cost Fallacy
Holding a bad stock because "I've already invested so much." Past losses have zero bearing on future returns.
Arkes & Blumer, 1985 · Sunk Cost Effect