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Behavioural Factors Influence on Investment Decisions

In: Proceedings of the 8th Global Conference on Business, Management, and Entrepreneurship (GCBME 2023)

Author

Listed:
  • Andrieta Shintia Dewi

    (Universitas Pendidikan Indonesia)

  • Nugraha Nugraha

    (Universitas Pendidikan Indonesia)

  • Imas Purnamasari

    (Universitas Pendidikan Indonesia)

  • Maya Sari

    (Universitas Pendidikan Indonesia)

  • Agus Rahayu

    (Universitas Pendidikan Indonesia)

  • Lili Adi Wibowo

    (Universitas Pendidikan Indonesia)

Abstract

In making decisions, investors display irrational behaviour. The decision-making process is considered cognitive, as investors must choose based on various available options. According to the findings, various psychological/behavioural factors negatively impacted the investors’ decision-making. The current research was conducted to determine the influence of behavioural factors on investors’ investment decisions. Five behavioural factors, namely overconfidence bias, representative bias, regret aversion, mental accounting, and herd behaviour, were considered to examine investors’ behavioural biases. The cohort for this study comprised Kerala investors, and the analytical hierarchy process (AHP) was utilized to determine the impact of behavioural factors on investment decisions. Based on the priority vector, it was determined that overconfidence bias and regret aversion substantially impacted Kerala’s investors. The influence of group behaviour on their decision-making decreased.

Suggested Citation

  • Andrieta Shintia Dewi & Nugraha Nugraha & Imas Purnamasari & Maya Sari & Agus Rahayu & Lili Adi Wibowo, 2024. "Behavioural Factors Influence on Investment Decisions," Advances in Economics, Business and Management Research, in: Ratih Hurriyati & Lili Adi Wibowo & Sulastri Sulastri & Lisnawati Lisnawati (ed.), Proceedings of the 8th Global Conference on Business, Management, and Entrepreneurship (GCBME 2023), pages 24-29, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-443-3_4
    DOI: 10.2991/978-94-6463-443-3_4
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