Behavioral Biases and Investment Decision-Making: The Mediating Role of Trust in AI and the Moderating Role of Financial and Digital Financial Literacy: A Narrative Literature Review
Published in July-Sept 2026 (Vol. 1, Issue 3, 2026)

Keywords
Abstract
References
- [1]Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T Baker, H. K., & Ricciardi, V. (2014). How biases affect investor behaviour. The European Financial Review, 10(7), 7–10. Baker, T., & Dellaert, B. G. C. (2018). Regulating robo-advice across the financial services industry. Iowa Law Review, 103(2), 713–750. Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. In G. Constantinides, M. Harris, & R. Stulz (Eds.), Handbook of the Economics of Finance (Vol. 1, pp. 1053–1128). Elsevier. Bashir, T., Azam, N., Butt, A. A., Javed, A., & Tanvir, A. (2013). Are behavioral biases influenced by demographic characteristics and personality traits? Evidence from Pakistan. European Scientific Journal, 9(29), 277–293. Belanche, D., Casaló, L. V., & Flavián, C. (2019). Artificial intelligence in fintech: Understanding robo-advisor adoption among customers. Industrial Management & Data Systems, 119(7), 1411–1430. Bikhchandani, S., & Sharma, S. (2001). Herd behavior in financial markets. IMF Staff Papers, 47(3), 279–310. European Parliament & Council of the European Union. (2024). Artificial Intelligence Act. Official Journal of the European Union. European Securities and Markets Authority. (2023). Artificial intelligence in EU securities markets. ESMA Report. Financial Conduct Authority. (2022). Artificial intelligence and machine learning in UK financial services. FCA Discussion Paper. Glaser, M., Langer, T., & Weber, M. (2007). On the trend recognition and forecasting ability of professional traders. Decision Analysis, 4(4), 176–193. Longoni, C., Bonezzi, A., & Morewedge, C. K. (2019). Resistance to medical artificial intelligence. Journal of Consumer Research, 46(4), 629–650. https://doi.org/10.1093/jcr/ucz013 Morgan, P. J., Huang, B., & Trinh, L. Q. (2019). The need to promote digital financial literacy for the digital age. Asian Development Bank Institute Working Paper No. 1008. Mousa, G. A., Elamir, E. A. H., & Abdelaziz, H. M. (2023). Behavioral biases and investment decisions in the Egyptian stock market: A review of recent evidence. Review of Behavioral Finance, 15(4), 512–529. OECD. (2023). OECD/INFE toolkit for measuring financial literacy and financial inclusion 2023. OECD Publishing. OECD. (2024). OECD consumer finance risk monitor 2024. OECD Publishing. Pompian, M. M. (2012). Behavioral finance and investor types: Managing behavior to make better investment decisions (2nd ed.). Wiley. Rastogi, S., Chaudhary, R., & Sharma, A. (2022). Digital financial literacy and financial well-being in emerging economies: Evidence from India. International Journal of Social Economics, 49(8), 1147–1163. Ricciardi, V., & Simon, H. K. (2000). What is behavioral finance? Business, Education and Technology Journal, 2(2), 1–9. Securities and Exchange Commission. (2017). Guidance update: Robo-advisers. U.S. Securities and Exchange Commission. Securities and Exchange Commission. (2024). 2024 examination priorities. U.S. Securities and Exchange Commission. Shefrin, H., & Statman, M. (1985). The disposition to sell winners too early and ride losers too long: Theory and evidence. The Journal of Finance, 40(3), 777–790. https://doi.org/10.1111/j.1540-6261.1985.tb05002.x Xiao, J. J., & Porto, N. (2022). Financial literacy and investment behaviors among young adults. Journal of Consumer Affairs, 56(2), 604–628.
Authors (2)
Rahul Negi
Hemwati Nandan Bahuguna Garhwa...Hemwati Nandan Bahuguna Garhwal University (HNBGU)...Hemwati Nandan Bahuguna Garhwal University (HNBGU), Srinagar, Uttarakh...Hemwati Nandan Bahuguna Garhwal University (HNBGU), Srinagar, Uttarakhand, India
View all publications →Kaushal Kumar
D.A.V. (P.G.) College, Dehradu...D.A.V. (P.G.) College, Dehradun, Uttarakhand, Indi...D.A.V. (P.G.) College, Dehradun, Uttarakhand, IndiaD.A.V. (P.G.) College, Dehradun, Uttarakhand, India
View all publications →Download Article
Best for printing and citation
Summarise this paper with AI:
Article Information
Published in:
July-Sept 2026 (Vol. 1, Issue 3, 2026)Article Impact
How to Cite
Negi & Kumar (2026). Behavioral Biases and Investment Decision-Making: The Mediating Role of Trust in AI and the Moderating Role of Financial and Digital Financial Literacy: A Narrative Literature Review. International Journal of Management and Sustainability Practices, 1(3), 82 - 89. https://ijmsp.com/articles/IJMSP310002
Article Actions
More from this Issue
More by These Authors
From State Stewardship to Collaborative Governance: A Qualitative Study of Emerging Models of Private-Led Wildlife Conservation in India
2026 • Vol. 1, Issue 1
Read more →