This study employs structural equation modelling (SEM) for analysing data collected from a nationwide survey with 396 individual investors, for exploring the factors influencing individual investors’ decision-making in the Indian stock market. This study explored the factors that underpin individual investors’ investment decision-making behaviour to find whether the Indian financial market is efficient and investors make rational decisions. The result indicates that the investors are significantly influenced by herding, information cascades, anchoring, representativeness and overconfidence while contagion shows the insignificant result. Concurrently, the study has also provided strong evidence of investors’ irrationality as well as inefficiency of the financial market. The results can be used for the further exploration of trading behaviour of individual investors and foster new research in the context of behavioural finance.
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