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Testing of behavior bias: Gamblers fallacy, halo effect and familiarity effect on investors

Author

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  • Herwan Darwis

    (Economic and Business Faculty, Universitas Khairun, Jusuf Abdurrahman Street, 97719, Ternate, Indonesia)

  • Suwito Suwito

    (Economic and Business Faculty, Universitas Khairun, Jusuf Abdurrahman Street, 97719, Ternate, Indonesia)

  • Zainuddin Jhay

    (Economic and Business Faculty, Universitas Khairun, Jusuf Abdurrahman Street, 97719, Ternate, Indonesia)

Abstract

This study aims to (i) test the behavior bias of gamblers fallacy occurs at the time of uptrend and downtrend conditions; (ii) test the behavior bias of halo effect occurs at the time of uptrend and downtrend conditions; and (iii) test the behavior bias of familiarity effect occurs at the time of uptrend and downtrend conditions. The number of samples in the study was as many as 41 people. The test equipment used is One-Sample t-Test and Paired t-Test by using statistical package for social scientists (SPSS) as a static test tool. The results of this study show that: (i) Gamblers' fallacy that occurs when the uptrend condition is greater than when the condition is downtrend; (ii) Halo effect that occurs when the uptrend condition is greater than when the downtrend condition; (iii) Familiarity effect that occurs when the uptrend condition is greater than when the downtrend condition. Key Words:Behavioral Bias, Gamblers Fallacy, Halo Effect, Familiarity Effect

Suggested Citation

  • Herwan Darwis & Suwito Suwito & Zainuddin Jhay, 2021. "Testing of behavior bias: Gamblers fallacy, halo effect and familiarity effect on investors," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(8), pages 275-283, December.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:8:p:275-283
    DOI: 10.20525/ijrbs.v10i8.1482
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    References listed on IDEAS

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    1. Rachel Croson & James Sundali, 2005. "The Gambler’s Fallacy and the Hot Hand: Empirical Data from Casinos," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 195-209, May.
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    3. Hopfensitz, Astrid, 2009. "Previous outcomes and reference dependence: A meta study of repeated investment tasks with and without restricted feedback," MPRA Paper 16096, University Library of Munich, Germany.
    4. Elke U. Weber & Christopher Hsee, 1998. "Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk," Management Science, INFORMS, vol. 44(9), pages 1205-1217, September.
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