Received: 13.06.2021; Revised: 22.07.2021, Accepted: 15.09.2021, Published Online: 29.09.2021

Anuradha Samal

Assistant Professor, Department of Business Administration, Sambalpur University Jyoti Vihar, Burla- 768019, Odisha, India, Mail ID: samalanu@gmail.com


Prof. (Dr.) A. K.Das Mohapatra

Vice Chancellor, Odisha State Open University, Sambalpur, Odisha, India

Mail ID: akdm.2002@gmail.com



The field of finance remained dominated by the classical financial theories mid 18th century. These central pillars of these theories were developed by Modigilani and Miller Arbitrage Principles, Markowitz Portfolio Theory, Sharpe’s Capital Asset Pricing Model and Black Scholes  Option Pricing theory. The commonalities of assumptions in these theories were: markets are efficient, investors make rational decisions, all the market information are included in the stock prices. But later these assumptions were challenged by the psychologists who argued that financial decisions are influenced by emotional biases and cognitive errors which influence investors to act in an irrational manner. One of the cognitive biases is herd behavior. This paper focuses on the review aspect of herd behiour in India as well as around the world.

Keywords: Behavioral Finance, biases, financial decisions, financial instruments.