The impact of decision fatigue on meme coin investment behavior and performance: a quantitative study based on behavioral finance

Abstract

This study examines how decision fatigue (DF) affects investment behavior and performance in the meme coin cryptocurrency market. The meme coin market is highly volatile, operates 24/7, and is driven by online communities, which exposes investors to continuous decision-making pressures that can lead to DF. Using a quantitative approach that combines simulated survey data with historical trading data, we empirically verify the relationships between DF, irrational trading behaviors (ITBs), and investment outcomes. The results indicate that higher DF is associated with more ITBs (such as chasing gains and overtrading) and with poorer investment performance. Additionally, external factors like extreme market volatility and intense social media attention exacerbate investors’ DF, while greater investment experience mitigates its negative effects. These findings contribute to the behavioral finance and cryptocurrency investment literature by providing actionable insights into managing DF for improved investment strategies and outcomes.