Emotional Biases in Digital Personal Finance Platforms: Evidence from App-Based Investors
DOI:
https://doi.org/10.66635/qgd1m217Keywords:
Behavioral finance, Prospect theory, Mental accounting, Digital platforms, Generational differences, App-based investorsAbstract
Emotional biases significantly influence financial decision-making in digital contexts, yet empirical evidence on generational differences in app-based investment platforms remains limited. This study examines how prospect theory and mental accounting theory explain heterogeneous emotional biases across generations using urban Indian investors. Drawing on primary data from 472 app-based investors in Bengaluru (aged 18–65), we employ SPSS-based multivariate regression and multi-group structural analysis to test seven hypotheses spanning loss aversion, regret aversion, and mental accounting behavior. Results reveal statistically significant generational moderating effects (Gen Z vs. Millennials vs. Gen X): Gen Z exhibits a 2.3 times higher intensity of loss aversion bias (β = 0.562, p < 0.001) than Gen X investors. Mental accounting propensity demonstrates stronger mediation of emotional bias on trading frequency among Millennials (indirect effect = 0.341, p < 0.01) versus other generations. Binary logistic regression identifies app features (real-time notifications, visual portfolio dashboards) as significant moderators, reducing impulsive trading by 34% among emotionally biased investors (OR = 0.66, 95% CI: 0.52–0.84). These findings extend behavioral finance theory to digital contexts and offer actionable insights for fintech platform design to mitigate the costs of emotional decision-making. Implications include gender-differentiated platform interventions and generational customization of user experience.
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