Conditional Process Model the Influence of Personality Traits and Behavioral Bias on Perception of Investment Performance

Abstract

This study examines the influence of personality traits on perceptions of investment performance with behavioral bias as a mediation and demographic factor as a moderation in the Indonesian capital market.Perception of investment performance is dependent variable in this study. While personality traits are independent variable in this study. Bias overconfidence as a mediating variable and demographic factor as a moderating variable. The research data processing uses the conditional process model. The results show that demographic factor is proven to be effective in moderating the influence of personality traits on perception of investment performance by mediating behavioral bias.

The Role of Financial Behavior in Mediating Financial Literacy, Financial Attitudes, Business Performance, and Business Sustainability in Jayapura City’s MSMEs

“…Investor with higher financial literacy tend to make more optimal investment decisions, and when individuals display overconfidence in their investment activities, this correlation become stronger (Pikulina et al, 2017). This discussion arises from the recognition that overconfidence, as a behavioral bias, does not necessarily have a negative effect on investors' financial decision-making processes (Seraj et al, 2022;Yusuf et al, 2021). On this research, overconfidence as a behavioral bias is proven to play its function to connecting the relationship of financial literacy and investment performance.…”

“…However, negative side of bias becomes apparent when individuals failed to recognize their own limitations, leading in in flawed decisions based on incorrect assumptions (Chira et al, 2008). It's important to note that overconfidence as a behavioral bias doesn't always result in negative outcomes in financial decision-making (Seraj et al, 2022;Yusuf et al, 2021). The tendency for individuals' overconfidence to underestimate the probability risk of losses leads to increase trading frequency and the development of portfolios with elevated risk (Seraj et al, 2022;Dangol & Manandhar, 2020).…”