Herd Instinct Bias, Emotional Biases, and Information Processing Biases in Investment Decisions

Armansyah, Rohmad Fuad

doi:10.9744/jmk.24.2.105-117

Cited by 6 publications

(11 citation statements)

References 34 publications

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“…However, studies on confirmation biases have been limited in Nepal. The study by Armansyah (2022) suggested that confirmation bias had a significant impact on the investment decisions of Indonesian investors. Most Nepalese research on behavioral finance has found a significant impact of overconfidence bias on investment decisions.…”

Section: Discussionmentioning

confidence: 99%

Impact of Cognitive Biases on Investment Decisions of Investors in Nepal

Dhakal

Lamsal²

2023

Lumbini J. Bus. & Econ.

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This study examines the impact of cognitive biases on the investment decisions of Nepalese stock market investors using a self-administered questionnaire as the primary data collection method. By analyzing a sample of 234 respondents, the research investigates the influence of six cognitive biases: overconfidence bias, herding bias, representativeness bias, anchoring bias, loss-aversion bias, and confirmation bias. The study used both descriptive and inferential statistical tools to analyze the data. The findings reveal that a significant proportion of respondents exhibited either high or moderate levels of bias, suggesting it to be a concerning issue. The study found that representativeness bias had the strongest effect on investment decision-making, followed by herding and anchoring biases. These results suggest that cognitive biases can significantly affect the investment decisions of Nepalese investors and may have negative consequences for their investment outcomes. The study recommends that investors be aware of these biases and take measures to reduce the impact on decision-making.

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Section: Discussionmentioning

confidence: 99%

Impact of Cognitive Biases on Investment Decisions of Investors in Nepal

Dhakal

Lamsal²

2023

Lumbini J. Bus. & Econ.

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“…Based on the work by Winston as cited above, Galily [32] emphasizes the "automatic responses" of bodies driven by patterns that have developed over many generations, a definition that serves well for our purposes. Scholars often decide to use latent variables to estimate the prevalence of instincts [33,34], as instincts are strongly interwoven with the subconscious [35]. Particularly in quantitative settings, it is unrealistic to unveil respondents' instincts in a direct, meaningful way within a survey.…”

Section: Stated Intentionmentioning

confidence: 99%

Planned versus instinctive behaviour: The connection between personality and food waste

Mann

2024

Sustain. Social Dev.

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Personality may influence food waste through planned as well as instinctive behaviour. Considerable attention has been devoted to planned behaviour because instincts are difficult to measure using attitudes, behaviours, and intentions. Our study intends to include the instinctive side of behaviour. We used a survey of 339 Swiss households regarding the amount of food waste generated to explore the pathways of how personality influences food waste behaviour. A regression analysis showed that agreeableness and conscientiousness are negative predictors of the amount of food waste. However, the different behaviour of conscientious consumers can be explained by an intermediate variable, whereas the different behaviour of agreeable people can’t. This lacking link can be due either to missing suitable intermediate variables or to the role of instinctive behaviour.

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“…Additionally, the media can play a role in challenging subjective norms that may not align appropriately. Armansyah (2022) has highlighted the significance of information processing bias, particularly in the context of advancements in information technology and communication media, and its substantial contribution to investment decision-making. Hasanudin (2023) explained that the availability of information from social media has a considerable influence on investment decisions among millennials.…”

Section: Information Media In Moderating Subjective Norms and Sharia ...mentioning

confidence: 99%

Generation Z Sharia investment decision patterns: Does information media matter?

Normasyhuri,

Saputri,

Anggraeni

2023

J. Eko. Keu. Isl.

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Purpose – This research examines the relationship between information quality, subjective norms, behavioral control in Generation Z Sharia investment decisions during the Covid-19 era. It also explores how media information can either reinforce or counter these factors.Methodology – Quantitative analysis was conducted in this study using SmartPLS 3.0. Primary data were collected from investor respondents during the Covid-19 pandemic from December 2021 to December 2022. The data collection was facilitated through Google Forms, and the indicator measurement utilized the Likert Scale.Findings – The study revealed a positive relationship pattern between information quality and behavioral control with Islamic investment decision-making in Generation Z during the Covid-19 era. Additionally, subjective norms showed a negative relationship pattern with Sharia investment decision-making in Generation Z during this time. Moreover, information media was found to influence the impact of information quality, subjective norms, and behavioral control on Islamic investment decision-making among Generation Z during the Covid-19 era.Implication – The insights from this research have been shared with investors, serving as a foundational reference for planning and implementing more effective and sustainable Sharia investment programs and strategies.Originality – This study introduces an alternative perspective by focusing on the realm of Islamic investment decisions made by Generation Z, a unique demographic with distinct characteristics, preferences, and behaviors. This investigation was conducted within the context of economic shocks, specifically during the Covid-19 period, and emphasized the role of information media as a crucial channel for rapid access to information, particularly through digital media. Additionally, the study employed the PLS-SEM model, adding a novel methodological approach to the research.

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Herd Instinct Bias, Emotional Biases, and Information Processing Biases in Investment Decisions

Cited by 6 publications

References 34 publications

Impact of Cognitive Biases on Investment Decisions of Investors in Nepal

Impact of Cognitive Biases on Investment Decisions of Investors in Nepal

Planned versus instinctive behaviour: The connection between personality and food waste

Generation Z Sharia investment decision patterns: Does information media matter?

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