Behavioral Biases on Investment Decision: A Case Study in Student Investors
Raden Dian Hardiana(a*), Nugraha (b), Imas Purnamasari (b), Maya Sari (b), Hanifia Arlinda (b)

a) Universitas Pendidikan Indonesia, Jl. Dr. Setiabudi No.229, Isola, Kec. Sukasari, Kota Bandung, Jawa Barat 40154
*dianhardiana[at]upi.edu
b) Universitas Pendidikan Indonesia, Jl. Dr. Setiabudi No.229, Isola, Kec. Sukasari, Kota Bandung, Jawa Barat 40154

Abstract

In the past two decades, there has been a significant shift from traditional finance to behavioral finance, which explores the role of cognition and emotions in financial decision-making. This study aims to examine how various psychological factors influence investment decision-making. This study uses a quantitative approach obtained through distributing questionnaires to 100 respondents, the data analysis technique uses Structural Equation Modeling (SEM). Respondents are student investors who are registered at the University Investment Gallery in Bandung City. The research findings show that all variables, anchoring bias, representativeness bias, loss aversion bias, overconfidence bias, optimism bias, and herding behavior have a significant effect on investment decisions. These results emphasize the influence of behavioral factors on investor decisions.

Keywords: Behavioral Finance, Investment Decisions, Cognitive Bias, Emotional Bias

Topic: Financial Management and Accounting