Influence of Big Five Personality Traits on Herding Bias: Delhi-NCR Region

Abstract

Herding is a phenomenon which has become a matter of curiosity among researchers. As herding amplifies the reaction of the retail investors to the developments in the stock market, and researchers are finding an answer to this problem in the personality traits of the investors. With a sample size of 100 respondents, the research took place in Delhi-NCR. Data collection took place with the help of a structural questionnaire. In this process, factor analysis was used to identify key variables, and multiple regression test was conducted to ascertain the association between the two variables. The study concluded that agreeableness and neuroticism were the personality traits which were highly vulnerable to herding bias. The observations of the study were that neuroticism and agreeableness are the two personality traits which are highly vulnerable to the problem of herding in stock market, whereas other personality traits did not share any significant relation with herding bias. The research will be immensely beneficial for the research advisors to develop plans in accordance with personality traits of the upcoming investors to save them from the fluctuations in the stock market.