Personality traits, availability bias, risk attitude and investment decisions: Moderating role of financial literacy and gender

The purpose of this study is to examine the impact of personality traits and availability bias on risk attitude and investment decisions. It also investigates the moderating role of financial literacy and gender in these relationships. Data was collected through an experiment conducted in a controlled environment using a structured questionnaire, yielding 239 usable responses. Multiple linear and logistic regression analyses were employed to test the study hypotheses. The findings indicate that personality traits significantly influence investment decisions, while risk attitude is also predicted by personality traits. Financial literacy moderates these relationships by reducing the effect of behavioral biases. The results suggest that investment decisions are prone to cognitive biases; therefore, practitioners should ensure the provision of accurate information to investors, as financial literacy can mitigate biased decision-making. The experimental design and the use of a carefully selected sample with varying levels of financial literacy represent key contributions of this study. Gender-specific outcomes further enhance the value of the findings.