Abstract

Purpose- This paper intends to study behavioral biases’ susceptibility due to demographic factors (gender, income, age, and education) through a review of available literature. As per the authors’ understanding based on the literature review, behavioral biases are susceptible due to demographic factors, and each bias is susceptible due to the different demographic factors. Overconfidence comes out to be the highest susceptible bias. This paper also explains conventional finance and behavioral finance theories, which have evolved over the period. It includes the difference in the behavior of rational investors and irrational investors.
Design/methodology/approach- A range of sources were explored to review the existing literature on behavioral biases and their association with demographic factors. Besides that, literature available on conventional finance and behavioral finance has also been evaluated. Out of multiple existing papers, only relevant papers form the sample for the present study. These relevant papers are classified on behalf of various variables (Age, income, gender, education, and behavioral biases) to know the current status of research on the stated topic.
Findings- This paper classifies the existing literature on demographic factors and behavioral biases and finds that the same area’s research output is at a nascent stage. It is recognized that gender, income, age, and education (demographic factors) influence behavioral biases. Overconfidence is the highest susceptible bias among all biases caused by demographic factors.
Research Limitations/Implications- The study has not focused on all demographic factors; it focuses on gender, age, income, education, and behavioral biases using secondary data. It is challenging to cover all biases in a single study through primary data, but authors have tried their best to cover most of the secondary data’s biases.
Originality/value- This paper arranges the collection, codification, and comprehensive bibliography and influences demographic factors on behavioral biases. This will be helpful for investors, academicians, Mutual fund advisors, practitioners, and future researchers.

Key words: Behavioral finance, Behavioral biases, Demographic factors, Overconfidence, Susceptibility.