Personality, motivation, and behavioural biases: An empirical investigation of herding behaviour among Indian retail investors

Abstract

This study explores the interrelationships among behavioural cues, personality traits, and motivational factors influencing herding behavior among individual investors in the Indian stock market. Drawing upon behavioural finance theory and Horney’s tripartite personality model, data were collected from 235 active investors in Bengaluru through a structured questionnaire. Statistical analyses including descriptive statistics, correlation, multiple regression, and ANOVA were applied to examine the influence of social, emotional, and cognitive motivations moderated by personality traits. The results reveal that social and emotional motivations significantly predict herding behavior, while cognitive capability negatively moderates it. Compliant investors exhibit the highest propensity toward herding, driven by social conformity and emotional vulnerability, whereas aggressive investors demonstrate analytical independence. The findings enrich behavioural finance literature by integrating psychological typologies with herding motivations and provide valuable implications for regulators, advisors, and educators.