Open AccessThe influence of risk perception, risk tolerance, overconfidence, and loss aversion towards investment decision making
Author(s) -
Nadya Septi Nur Aini,
Lutfi Lutfi
Publication year - 2019
Publication title -
journal of economics business and accountancy ventura
Language(s) - English
Resource type - Journals
eISSN - 2088-785X
pISSN - 2087-3735
DOI - 10.14414/jebav.v21i3.1663
Subject(s) - overconfidence effect , risk aversion (psychology) , investment (military) , loss aversion , risk perception , perception , actuarial science , investment decisions , structural equation modeling , financial risk , psychology , economics , social psychology , expected utility hypothesis , behavioral economics , microeconomics , financial economics , statistics , mathematics , neuroscience , politics , political science , law
This study aims to examine the effect of risk perception, risk tolerance, overconfidence, and loss aversion on investment decision making. The sample in this study were workers in Surabaya and Jombang, East Java. There were 400 respondents taken using a questionnaire through the survey method. This study used PLS-SEM (Partial Least Square-Structural Equation Model) as a data analysis technique. The results showed that risk perception has a significant and negative effect on investment decision making, risk tolerance and overconfidence have a significant and positive effect on investment decision making, while loss aversion has no effect on investment decision making. This research is expected to provide an overview of how to deal with risk in investment and how to avoid behavioral biases in investment decisions making.
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