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УДК 336.76:159.9

DOI: https://doi.org/10.36887/2415-8453-2026-3-46

Lykholet Sergii,
PhD in Economics, Associate Professor of the Department of International Economics,
Kyiv National Economic University named after Vadym Hetman,
https://orcid.org/0000-0003-1480-8812
Senkin Oleh,
Bachelor, Department of Global Finance and Accounting,
Cracow University of Economics,
https://orcid.org/0009-0000-5223-6582
Neukhatskyi Vladyslav,
Bachelor, Department of Global Finance and Accounting,
Cracow University of Economics,
https://orcid.org/0009-0008-6396-9595

JEL classification: G41, D91, D81

The article examines the impact of cognitive biases on investment decision-making. It substantiates the need to analyze them not only as distinct manifestations of behavioral irrationality but also as interconnected mechanisms in financial decision-making. The theoretical framework of the study is based on bounded rationality and prospect theory. Five cognitive biases that significantly affect investment behavior are systematized as follows: loss aversion, overconfidence, confirmation bias, herding behavior, and anchoring. Based on a synthesis of theoretical propositions and empirical findings, a classification of cognitive biases according to their dominant mechanism of influence is proposed. Three groups are distinguished: belief-formation and belief-protection biases, reference-point-dependent biases, and social-inference biases. The cumulative nature of interactions among cognitive biases is substantiated. In particular, a sequential mechanism is identified in which overconfidence contributes to the formation of a persistent investment belief, confirmation bias reinforces it through selective information processing, and loss aversion increases the psychological cost of abandoning the initial decision. The relationship between anchoring and herding behavior is also examined, highlighting the need to distinguish social imitation from synchronized investor responses to common reference points. Differentiated approaches to mitigating the negative effects of cognitive biases are proposed for individual investors, financial advisers, and institutions. The findings demonstrate that corrective measures should target not only individual biases but also the underlying mechanisms and stages through which investment decisions are formed.

Keywords: behavioral finance, investment decision-making, cognitive biases, loss aversion, disposition effect, overconfidence, confirmation bias, herding behavior, anchoring, investment behavior.

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The article was received 04.09.2026

Quote article, APA style

Lykholet S. , Senkin O. , Neukhatskyi V. 04.09.2026. Behavioral finance as a factor in investment decision-making: the impact of cognitive biases on financial choices. Ukrainian Journal of Applied Economics and Technology. 2026. №3. 257-263 pp. https://doi.org/10.36887/2415-8453-2026-3-46

Quote article, MLA style

Lykholet S. , Senkin O. , Neukhatskyi V. Behavioral finance as a factor in investment decision-making: the impact of cognitive biases on financial choices. Ukrainian Journal of Applied Economics and Technology. 04.09.2026. https://doi.org/10.36887/2415-8453-2026-3-46