WHAT CAN BE DONE BY OVERCONFIDENCE BIAS AND OPTIMISM BIAS ON INVESTOR DECISIONS?
Suhono, Nugraha

Universitas Singaperbangsa Karawang
Universitas Pendidikan Indonesia

Abstract

This study aims to analyze the relationship between overconfidence bias and optimism of investment decision bias. One approach of investors is to support the creation of investment decisions by integrating elements of excessive trust in reasoning, judgment, cognitive abilities, and emotions. To benefit from investment activities, investors must be right in making decisions. Some investors in the capital market tend to show irrational behavior that is influenced by psychological factors contrary to classical theory. This research uses quantitative methods with data collection techniques in the form of questionnaires distributed to investors in Karawang. Samples taken were as many as 120 investors in Karawang. This research was assisted with SPSS 16.0 statistical tools. Testing this study uses a test of validity and reliability. The analytical method uses the classical assumption test, multiple linear regression analysis, hypothesis testing. The results showed that overconfidence bias had a positive effect on investment decisions, and optimism bias had a positive effect on investment decision.

Keywords: overconfidence bias, optimism bias, investment decision

Topic: Financial Management and Accounting