Published Paper Details:

: Investment decision-making has increasingly been recognized as a behavioral process influenced by psychological biases and financial knowledge. Traditional finance theories assume investor rationality; however, behavioral finance challenges this assumption by highlighting systematic cognitive and emotional biases that distort judgement. At the same time, financial literacy plays a critical role in enabling investors to understand financial products, assess risk, and make informed investment choices. This empirical-oriented review paper revisits and synthesizes existing literature on behavioral biases and financial literacy with reference to investment decision-making. Using a structured review methodology, the study develops a conceptual framework and proposes testable hypotheses for future empirical research. The findings suggest that behavioral biases significantly influence investment decisions, while financial literacy plays both a direct and moderating role in shaping investor behavior. The study contributes to behavioral finance literature by integrating psychological and knowledge-based perspectives and offers valuable insights for policymakers, educators, and researchers.