2025, Vol. 8, Issue 2

author(s)
K Nirmala and Kiran Kumar PN

abstract
This study investigates the influence of the components of the Elaboration Likelihood Model (ELM)- specifically central and peripheral processing routes-on the investment decisions of individual stock market participants. Drawing on behavioural finance and persuasion theory, the research explores how factors such as financial literacy, investment experience, social influence, and information overload affect the depth of information processing and decision quality. The findings aim to differentiate rational evaluation from heuristic-driven behaviours like herding, contributing to a more nuanced understanding of investor psychology in emerging markets. A structured questionnaire was used to collect responses from 210 individual investors across major cities in South Karnataka. Statistical tools including descriptive analysis, correlation, multiple regression, and ANOVA were employed. The study revealed that most investors rely on perceived market trends and social influence rather than sound financial literacy or risk assessment. While risk tolerance showed a moderate impact on investment decisions, investor confidence and experience had limited influence. These findings suggest that individual investors often deviate from rational evaluation, reflecting a tendency towards herding behaviour.