The Impact of Technological Advancements on Investor Decision-Making and Stock Market Efficiency: A Comprehensive Analysis

Abstract

The study here investigates the influence of technological tools and behavioral biases on investment decision-making and stock market trading rationality. Using a dataset of 200 retail customers from Delhi-NCR, India, the research employs regression analysis to examine the effects of Robo-Advisors, Machine Learning Models, and Integrated Reporting on the Quality of Investment Decisions (QID), and how Anchoring Bias, Confirmation Bias, Herd Behavior, and Technological Tools affect Rationality of Stock Market Trading (RSMT). The results indicate that Robo-Advisors significantly improve investment decision quality, while Machine Learning Models and Integrated Reporting have moderate impacts. Behavioral biases such as Anchoring and Confirmation Bias significantly influence trading rationality, whereas Technological Tools do not have a notable effect. The findings hereon emphasize on the importance of integrating technology and addressing psychological biases to optimise investment strategies. Researchers in future should explore the causal effects of technological advancements and market dynamics instigating investor behavior. The study generates a clear understanding for Retail/wholesale investors, Asset managers, Investment advisors, and institutions aiming to optimize investment decision-making and improve market stability.