The Role of Risk Tolerance in Mediating the Effect of Overconfidence Bias, Representativeness Bias and Herding on Investment Decisions
Journal Title: Journal of Economics, Finance and Management Studies - Year 2023, Vol 6, Issue 07
Abstract
This study aims to analyze the impact of Overconfidence Bias, Representativeness Bias, and Herding towards investment decision making through Risk Tolerance, where psychological and social factors could have effect on the investors' decision making process. The sample was gathered using Snowball Sampling technique on 200 stock investors who have made transactions in the Indonesian Stock Exchange. The data was analyzed using SEM PLS with Smart PLS 3.2.9 application. The result shows that Overconfidence Bias and Representativeness Bias have significant impact on both direct and indirect investment decision making process through Risk Tolerance. On the other hand, Herding shows no effect on direct and indirect investment decision making process through Risk Tolerance.
Authors and Affiliations
Ratih Soraya, Asep Risman, Indra Siswanti
Keywords
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- EP ID EP727230
- DOI 10.47191/jefms/v6-i7-36
- Views 12
- Downloads 0
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