Examining The Influence of Behavioural Finance on Institutional Investors and Their Financial DecisionsMaking in Financial Markets

Traditional economic theory suggests that investment is all about making smart choices that maximize one's well-being. Behavioral finance ‎takes issue with this by showing how investors can be impacted by cognitive, emotional, and psychological biases. This research focuses ‎on institutional investors and the role of behavioral finance in affecting their investment decisions. This study seeks to evaluate the effect of ‎some of the most important cognitive biases, such as mental accounting, herding, overconfidence, and prospect theory, on investment choices-‎es made by dominant institutions.‎ Institutional investors have vast amounts of data and analytics; however, their possible biases can lower market efficiency and create financial issues. This article synthesizes recent studies of institutional investment behavioral biases and their impact on portfolio management, ‎market volatility, and regulatory policy. The study seeks to improve decision-making models, risk management practices, and regulatory ‎policy that foster rational investing behavior by discerning these biases. The results inform regulators, investment managers, and financial ‎professionals how to lessen the negative impacts of behavioral biases in institutional investment strategies‎.