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The Effect of Experienced Regret and Overconfidence Based on Profession on Investment Decisions in Banda Aceh

Author

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  • Sri Wahyuni

    (Management Department, Universitas Syiah Kuala, Indonesia)

  • Said Musnadi

    (Management Department, Universitas Syiah Kuala, Indonesia)

  • Faisal

    (Management Department, Universitas Syiah Kuala, Indonesia)

Abstract

This study was to see the effect of Experience Regret and Overconfidence on investment decisions with Profession as moderating. the population is all the people of Banda Aceh City who are investors in the capital market, which amounted to 5,126 investors spread over several securities. The criteria for selecting the sample were those who have made financial investments through various existing financial instruments, amounting to 150 people. The allocation of the sample was each 50 from civil servants, State Own Enterprise (SOE) employees, and private employees. Data were analyzed using Structural Equation Modeling (SEM). The results show that experienced regret affects investment decisions, overconfidence affects investment decisions, and profession does not moderate the influence between experienced regret and overconfidence on investment decisions. This finding contributes academically, that the investment decision model in the Capital Market by the people in Banda Aceh City depends on their experienced regret and overconfidence, but does not depend on the type of their profession which consists of civil servants, SOE employees, and private employees. In the multi-group test results, although the effect is not significant, it can be seen that civil servants have experienced regrets that influence investment decisions more strongly than SOE employees and private employees. However, for overconfidence, SOE employees have overconfidence which influences investment decisions more strongly than civil servants and private employees.

Suggested Citation

  • Sri Wahyuni & Said Musnadi & Faisal, 2021. "The Effect of Experienced Regret and Overconfidence Based on Profession on Investment Decisions in Banda Aceh," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(10), pages 599-605, October.
    • Handle: RePEc:bcp:journl:v:5:y:2021:i:10:p:599-605
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    References listed on IDEAS

    as
    1. David E. Bell, 1982. "Regret in Decision Making under Uncertainty," Operations Research, INFORMS, vol. 30(5), pages 961-981, October.
    2. repec:eme:ijoes0:ijoes-12-2017-0235 is not listed on IDEAS
    3. Said Musnadi & Faisal & M. Shabri Abd. Majid, 2018. "Overreaction and underreaction anomalies in the Indonesian stock market: a sectoral analysis," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 34(4), pages 442-457, October.
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