Influence of Planning Fallacy and Herd Behaviors bias on Investors Decision Making Process in North Eastern Nigeria

Abstract

                                                                       Abstract

The objective of this study is to examine the influence of planning fallacy and herd behaviors bias 
on investors’ decision-making process in north eastern Nigeria. Structured questionnaire was used 
to collect primary data from investors in Nigeria. A sample size of 384 respondents was used was 
used. Multiple regressions were used with the aid of SPSS version 25 for data analysis. The results 
from the regression analysis show that the influence of the planning fallacy on investors’ decision
making process is significant at 0.002 level of significant and herd behaviors bias is significant at 
0.000 level of significant. Therefore, this study concludes that planning fallacy and herd behaviours 
bias has significant influence on investors’ decision-making process in north eastern Nigeria, this 
is because investors are confidence of trading more in the market because their past experiences, 
companies’ performance, following other successful investors and believe that for sure there will 
be positive outcome in the near future. Therefore, this implied that to be successful in trading in 
the financial market, investors should minimize the negative consequences of this bias and 
maximizing its beneficial aspects.  The recommend that the solution to dealing with individual
level biases may lie in altering group decision-making processes, investors need to ask for and 
heed outsiders' advice. Investors need to take action to reduce any bad effects resulting from their 
prejudices even if they do not control their biases.