How does people's social attachment influence their investment decision? Using empathy to explain availability bias

ANALYSIS OF FACTORS THAT ARE CONSIDERED BY INVESTORS IN STOCKS INVESTMENT DECISION MAKING IN BATAM CITY

JMBI UNSRAT (Jurnal Ilmiah Manajemen Bisnis dan Inovasi Universitas Sam Ratulangi). ◽

10.35794/jmbi.v8i1.33266 ◽

2021 ◽

Vol 8 (1) ◽

Author(s):

Fendy Cuandra ◽

Helen Tan

Keyword(s):

Decision Making ◽

Locus Of Control ◽

Data Collection ◽

Investment Decision ◽

Investment Decisions ◽

Availability Bias ◽

Stock Investment ◽

Investment Decision Making ◽

Application Data

Abstract:The purpose of this research is to analyze the factors that investors should consider in stock investment decision making. This research was conducted to assess the interest in investing and consideration when investing which is influenced by representative bias, availability bias, and locus of control. This research was tested using Smart PLS application. Data collection from this study was conducted by distributing questionnaires as many as 353 people in Batam city. Representative bias significantly positively affects investment decision making, availability bias significantly and positively in investment decisions, availability bias moderated locus of control has no effect on investment decision making, and representative bias moderated locus of control has no effect on investment decision making. This research facilitates investors in making investment decisions in Batam city, judging from several factors that influence the decision making helps investors in determining investment and considering every factor that influences Decision making. Abstrak: Tujuan dari penelitian ini adalah untuk menganalisa faktor yang harus dipertimbangkan investor dalam pengambilan keputusan investasi Saham. Penelitian ini dilakukan untuk menilai ketertarikan dalam melakukan investasi dan pertimbangan saat berinvestasi yang dipengaruhi oleh representative bias, availability bias, dan locus of control. Penelitian ini di uji dengan menggunakan aplikasi Smart PLS. Pengumpulan data dari penelitian ini dilakukan dengan cara menyebarkan kuesioner sebanyak 353 orang yang berada kota Batam. Representative bias secara signifikan positif mempengaruhi investment desicion making, availability bias secara signifikan dan positif dalam keputusan investasi, availability bias yang dimoderasi locus of control tidak berpengaruh terhadap investment decision making, dan representative bias yang dimoderasi locus of control tidak berpengaruh terhadap investment decision making. Penelitian ini memberi kemudahan investor dalam mengambil keputusan investasi di kota Batam, dilihat dari beberapa faktor yang mempengaruhi pengambilan keputusan ini membantu para investor dalam menentukan investasi dan mempertimbangkan setiap faktor yang mempengaruhi Decision making.

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The impact of heuristic availability bias on investment decision‐making : Moderated mediation model

Business Strategy & Development ◽

10.1002/bsd2.148 ◽

2020 ◽

Author(s):

Muhammad Salman ◽

Bakhtiar Khan ◽

Sher Zaman Khan ◽

Rafi Ullah Khan

Keyword(s):

Decision Making ◽

Investment Decision ◽

Moderated Mediation ◽

Mediation Model ◽

Availability Bias ◽

Moderated Mediation Model ◽

Investment Decision Making ◽

The Impact

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PSYCHOLOGICAL FACTORS AND INVESTMENT DECISIONS IN THE NIGERIA CAPITAL MARKET

Oradea Journal of Business and Economics ◽

10.47535/1991ojbe119 ◽

2021 ◽

Vol 6 (1) ◽

pp. 33-41

Author(s):

Esther Ikavbo Evbayiro-Osagie ◽

Michael Ify Chijuka

Keyword(s):

Decision Making ◽

Stock Market ◽

Capital Market ◽

Psychological Factors ◽

Investment Decision ◽

Investment Decisions ◽

Factors Affecting ◽

Availability Bias ◽

Investment Decision Making ◽

Behavioral Influences

This study examines Behavioral Factors and Investment Decision Making in the Nigerian Stock Exchange (NSE). Thus, the research question is what are the psychological factors affecting investment decisions in the Nigerian capital market. A structured questionnaire was used in collecting data and it was able to collect data from 75 investors with the application of a convenient sampling method. Using overconfidence bias, availability bias, conservatism, and herding effect to define the most important behavioral element affecting investment decision making by investors in the Nigerian. Multiple regression analysis was used as the key methodological method for evaluating the research hypothesis, whereas the internal consistency of the questionnaire calculated from Cronbach's alpha on all variables showed values greater than 0.7 with a sufficient level of reliability. The primary beneficiary group would be the buyers on the stock market who would be educated enough about the effect of their own behavioral influences on their stock market decision making. The knowledge would be useful in making optimal investment decisions and avoiding unfavorable decisions to increase their resources. In turn, it will be helpful to policymakers and stock market regulators to help them understand the position of behavioral influences inherited in consumer decision-making and that may be associated with the need for stock market brokers to update their customer's trading practices to a higher level. The findings of this study suggest that overconfidence, availability bias, and herding impact demonstrated a positive significant relationship with NSE investment decision-making except conservatism which showed a negative relationship with investment decision-making but at 0.01 levels statistically significant. On the basis of the results, it can be generalized that the most prevalent factors affecting investor investment decision taking in NSE are overconfidence, availability bias, and herding influence.

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The impact of heuristic biases on investors’ investment decision in Pakistan stock market: moderating role of long term orientation

Qualitative Research in Financial Markets ◽

10.1108/qrfm-03-2020-0028 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Imran Khan ◽

Mustafa Afeef ◽

Shahid Jan ◽

Anjum Ihsan

Keyword(s):

Stock Market ◽

Investment Decision ◽

Investment Decisions ◽

Moderating Effect ◽

Individual Investors ◽

Content Type ◽

Availability Bias ◽

Moderating Role

Purpose The purpose of this paper is to investigate the effect of heuristic biases, namely, availability bias and representativeness bias on investors’ investment decisions in the Pakistan stock exchange, as well as the moderating role of long-term orientation. Design/methodology/approach Using a structured questionnaire, a total of 374 responses have been collected from individual investors trading in PSX. The relationship was tested by applying the partial least square structural equation model using SmartPLS 3.2.2. Further, Henseler and Chin’s (2010) product indicator approach for moderation analysis was applied to the data set. Findings The results revealed that availability bias and representativeness bias have a significant and positive influence on the investment decisions of investors. Furthermore, a significant moderating effect of long term orientation on the effect of representativeness bias on investment decision is observed. This suggests that investors’ long term orientation weaken the effect of representativeness bias on investment decision. However, no significant moderating effect was observed for availability bias. Originality/value The paper provides novel insights on the role of heuristic-driven biases on the investment decisions of individual investors in the stock market. Particularly, it enhanced the understanding of behavioral aspects of investment decision-making in an emerging market.

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ANALYSIS OF FACTORS INFLUENCING INVESTMENT DECISION

Journal of Global Business and Management Review ◽

10.37253/jgbmr.v2i1.805 ◽

2020 ◽

Vol 2 (1) ◽

pp. 13

Author(s):

Hesniati Hesniati

Keyword(s):

Information Asymmetry ◽

Behavioral Finance ◽

Investment Decision ◽

Linear Regression Analysis ◽

Intrinsic Factor ◽

Multiple Linear Regression Analysis ◽

Investor Behavior ◽

Availability Bias ◽

Investment Decision Making ◽

The Impact

Gold presents as important role in an investor's portfolio because it provides stability of returns and favorable opportunity to improve investor wealth. Investment decision making depend on intrinsic factor investor behavior. Therefore, this study aims to investigate the impact of behavioral finance toward investment decision in gold instrument. Anchoring, availability bias, information asymmetry, representative bias, and risk aversion are chosen as behavioral finance factors. This study is conducted in Batam City Indonesia with 143 respondents and analysed using multiple linear regression analysis. Findings reveal behavioral factors such as information asymmetry and availability bias have significant impact on investment decision. However, the other independent variables do not have significant impact on investment decision.

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