The Influence of Overconfidence, Anchoring, and Herding Bias Behaviour on Investment Decisions

Abstract

The increase in investors indicates that many people are more aware of investments and their returns. This study aims to examine the influence of behavioral biases such as overconfidence, disposition effect, and herding on investment decisions across all generations in Indonesia. The study used probability sampling techniques to determine the sample and distributed questionnaires to 223 respondents. The analysis technique used structural equations with Smart PLS. The results showed that behavioral biases such as overconfidence had a significant positive effect on investment decisions. Meanwhile, behavioral biases such as disposition effect had a significant negative effect on investment decisions. Meanwhile, behavioral biases such as herding did not affect investment decisions.