Economics and Business
Quarterly Reviews
ISSN 2775-9237 (Online)
Published: 08 June 2024
Effect of Representativeness Bias, Availability Bias and Anchoring Bias on Investment Decisions
Muhammad Bayu Aji Sumantri, Neneng Susanti, Pebri Yanida
Widyatama University, Indonesia
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10.31014/aior.1992.07.02.586
Pages: 199-206
Keywords: Behavioral Finance, Investment Decision, Financial Bias
Abstract
This study aims to determine the effect of three types of financial behavioral bias, namely representativeness bias, availability bias, and anchoring bias on investment decisions. This study uses a quantitative method with a purposive sampling technique. Data were collected through questionnaires and analyzed using Structural Equation Modeling (SEM) with the help of SmartPLS 3.0 software. The results of the study show that the two types of financial behavioral bias have a significant effect on investment decisions which are the representativeness bias and the availability bias on investment decisions, while anchoring bias does not have an effect on investment decisions. This research can contribute to investors to better understand the effect of financial behavior bias on investment decisions and to take wiser actions in investing.
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