Vision 1–14 © 2021 MDI Reprints and permissions: in.sagepub.com/journals-permissions-india DOI: 10.1177/09722629211046082 journals.sagepub.com/home/vis Factors Affecting Risk Perception in Respect of Equity Shares: A Social Network Analysis Approach Ranjit Singh 1 , Jayashree Bhattacharjee 2 and K. Kajol 1 Abstract The study intends to identify the factors that affect the risk perception of investors towards equity shares and further identifies the association between the identified factors. The study aims to conduct a thorough analysis of the factors affecting risk perception along with measurement of their influence on risk perception in respect of equity shares using Social Network Analysis (SNA). The factors influencing risk perception in equity shares have been identified through review of literature. Delphi technique was employed to determine the association between the factors and the significance of the impact of each of the factors was analysed using SNA. The study found that culture and education are most critical factors among the other factors influencing risk perception in respect of equity shares. While the factors such as capacity of investors, framing effect and loss aversion does not have much impact on the risk perception. The study will help the investors in making decision to invest in equity shares. The present study also gives avenues for the future research by providing the area where more research is needed. Key Words Perception, Equity Shares, Social Network Analysis (SNA), Risk, Investment Research Article 1 Department of Management Studies, Indian Institute of Information Technology Allahabad, Prayagraj, Uttar Pradesh, India. 2 Department of Business Administration, Assam University, Silchar, Assam, India. Corresponding author: K. Kajol, Department of Management Studies, Indian Institute of Information Technology Allahabad, Prayagraj, Uttar Pradesh 211015, India. E-mail: rsm2018003@iiita.ac.in Introduction The risk is a concept which indicates a potentially negative influence on an asset or some features of value that may arise from some present process or future event. Risk perception is a personalized idealism that people make about the features and severity of a risk (Bhattacharjee et al., 2020). Risk perception analyses the opinions of people when they are asked to evaluate hazardous or risky activities, substances and technologies (Slovic, 1987). Risk perception involves peoples’ beliefs, attitudes, judgments and feelings as well as their values, both social and cultural and dispositions (Bhattacharjee et al., 2020). It plays an important role in an individual’s decision-making process and so with the decision to invest (Pidgeon et al., 1992). Farrelly and Reichenstein (1984) cited the results of studies conducted by Godding (1975), Cooley (1977) and Laughhunn et al. (1981) and concluded that risk perception is a complex cognitive process. Out of all forms of investment, investment in equity share is different from that of others. The risk inherent in equity investment is relatively high due to uncertainly of returns and hence the risk perception of investors is also relatively high and therefore, a proper risk and return trade- off is essential before making any investment in equity shares by the retail equity investors (Bhattacharjee et al., 2020; Singh & Bhowal, 2009a). Higher equity investment makes people more entrepreneurial and risk-taking which leads to the growth of the economy (Singh & Bhowal, 2009b). The risk perception has influence upon the equity investment of the investors (Lennart, 2002; Milliman & Weber, 1997; Singh & Bhowal, 2009c; Slovic, 1987; ). It was found that risk perception of investors and actual equity investment has inverse relationship (Lennart, 2002; Roszkowski, 2010; Singh, 2011a; Veeramani & Karthikeyan, 2014). Thus, there is a need to manage the risk perception of the investors in order to get a desired result in the economy by way of increased investment and consequently increased level of entrepreneurial activity Singh and Bhowal (2009b). However, the risk perception of investors can be managed only if the investors are aware of their level of risk perception (Singh & Bhowal, 2008)