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This article aims to systematically review the literature published in recognized journals focused on cognitive heuristic-driven biases and their effect on investment management activities and market efficiency. It also includes some of the research work on the origins and foundations of behavioral finance, and how this has grown substantially to become an established and particular subject of study in its own right. The study also aims to provide future direction to the researchers working in this field.

For doing research synthesis, a systematic literature review (SLR) approach was applied considering research studies published within the time period, i.e. 1970–2021. This study attempted to accomplish a critical review of 176 studies out of 256 studies identified, which were published in reputable journals to synthesize the existing literature in the behavioral finance domain-related explicitly to cognitive heuristic-driven biases and their effect on investment management activities and market efficiency as well as on the origins and foundations of behavioral finance.

This review reveals that investors often use cognitive heuristics to reduce the risk of losses in uncertain situations, but that leads to errors in judgment; as a result, investors make irrational decisions, which may cause the market to overreact or underreact – in both situations, the market becomes inefficient. Overall, the literature demonstrates that there is currently no consensus on the usefulness of cognitive heuristics in the context of investment management activities and market efficiency. Therefore, a lack of consensus about this topic suggests that further studies may bring relevant contributions to the literature. Based on the gaps analysis, three major categories of gaps, namely theoretical and methodological gaps, and contextual gaps, are found, where research is needed.

The skillful understanding and knowledge of the cognitive heuristic-driven biases will help the investors, financial institutions and policymakers to overcome the adverse effect of these behavioral biases in the stock market. This article provides a detailed explanation of cognitive heuristic-driven biases and their influence on investment management activities and market efficiency, which could be very useful for finance practitioners, such as an investor who plays at the stock exchange, a portfolio manager, a financial strategist/advisor in an investment firm, a financial planner, an investment banker, a trader/broker at the stock exchange or a financial analyst. But most importantly, the term also includes all those persons who manage corporate entities and are responsible for making their financial management strategies.

Currently, no recent study exists, which reviews and evaluates the empirical research on cognitive heuristic-driven biases displayed by investors. The current study is original in discussing the role of cognitive heuristic-driven biases in investment management activities and market efficiency as well as the history and foundations of behavioral finance by means of research synthesis. This paper is useful to researchers, academicians, policymakers and those working in the area of behavioral finance in understanding the role that cognitive heuristic plays in investment management activities and market efficiency.

Building on the conservation of resources theory, this research explored the processes underlying the association between perceived workplace incivility and deviant behaviors. Specifically, we tested a mediating mechanism, an interpersonal conflict that has received less consideration in the workplace incivility literature. The authors also tested the organizational climate (i.e. a resource) as a moderator in the perceived workplace incivility–employees’ deviant work behavior relationship.

Time-lagged research design was followed to explain the relationship of variables. Survey data were collected at time 1 and time 2 from 220 service sector working professionals to test the proposed model.

The findings suggest that intrapersonal conflict partially mediates the workplace incivility–deviant work behavior relationship. Further, the authors found that the harmful effects of workplace incivility on employees’ deviant work behavior attenuate in the presence of organizational climate as a resource. The results shed light on the beneficial consequences of organizational climate on employees’ work behavior by attenuating workplace incivility and mitigating their deviant work behaviors.

Overall, the study contributed to understanding the mediating role of interpersonal conflict and the moderating role of organizational climate in explaining the workplace incivility–deviant work behavior relationship.