AUTOMATING RATIONALITY: THE POTENTIAL OF ROBO-ADVISORS IN REDUCING BEHAVIORAL BIASES

Authors

  • DR. MOUMITA SAHA ASSOCIATE PROFESSOR, DEPARTMENT OF MANAGEMENT, BRAINWARE UNIVERSITY
  • DR. MEGHOOT GHOSH PRINCIPAL, POST GRADUATE INSTITUTE OF HOSPITAL ADMINISTRATION (AFFILIATED TO MAKAUT), PEERLESS HOSPITAL CAMPUS, KOLKATA.

Keywords:

Individual Decision Making, Behavioral bias, Overconfidence bias, Herding Behavior, Loss aversion bias, Indian Stock Market, Individual investors

Abstract

Decision-making in investments is often flawed due to behavioral biases, leading to suboptimal choices. Robo-advisors aim to mitigate these biases through personalized risk assessment. However, their effectiveness in India is understudied. A study of 192 retail investors in Kolkata found that biases like overconfidence and loss aversion lead to irrational investment decisions. Surprisingly, Indian robo-advisors struggle to address these biases. The study suggests that next-gen robo-advisors, informed by behavioral finance insights, are needed to support rational investment decisions. It also highlights robo-advisors' potential to democratize financial guidance, especially for underserved populations, and advocates for greater awareness and adoption in India's financial ecosystem.

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How to Cite

SAHA, D. M., & GHOSH, D. M. (2025). AUTOMATING RATIONALITY: THE POTENTIAL OF ROBO-ADVISORS IN REDUCING BEHAVIORAL BIASES. TPM – Testing, Psychometrics, Methodology in Applied Psychology, 32(S7 (2025): Posted 10 October), 1420–1429. Retrieved from https://tpmap.org/submission/index.php/tpm/article/view/2372

Issue

Vol. 32 No. S7 (2025): Posted 10 October (2025)

Section

Articles

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Creative Commons License

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.