The swift advancement of digital applied science has made access to in-formation faster and easier. One of the impacts is that the younger generation is starting to be encouraged to engage in various activities such as investment. The younger generation's interest in investment has a beneficial effect on the growth of the capital market. However, behind these good benefits, social media also brings negative impacts because information is spread so quickly. The impact of this ease of social media information is the emergence of the FOMO phenomenon in investing, especially in Generation Z. There are several things that influence decisions in investing, such as overconfidence bias, heuristics, and disposition effects. The study aims to determine and analyze the relationship between investor sentiment and behavioral biases, such as heuristics, overconfidence, and dispositional effects on the investment decisions of Generation Z members investors in West Java, and whether overconfidence bias and dispositional effects mediate heuristics and investment decisions of these investors. This research sample consists of 400 individual investor research subjects in West Java. The information obtained was later evaluated utilizing the PLS SEM method. The outcomes of this research indicate that heuristic bias, overconfidence, and disposition effects have a notable effect on investment decisions. Overconfidence bias and dispositional effects also substantially mediate the connection between heuristic bias and investment decisions. In addition, overconfidence bias and disposition effect together substantially mediate the connection between heuristic bias and investment decisions of Generation Z investors in West Java.

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The Effect of Heuristic Bias and Investment Decisions Mediated by Overconfidence, Mediation, and Disposition Effects

  • Maya Serungke Tri Astuti,
  • Putri Fariska

摘要

The swift advancement of digital applied science has made access to in-formation faster and easier. One of the impacts is that the younger generation is starting to be encouraged to engage in various activities such as investment. The younger generation's interest in investment has a beneficial effect on the growth of the capital market. However, behind these good benefits, social media also brings negative impacts because information is spread so quickly. The impact of this ease of social media information is the emergence of the FOMO phenomenon in investing, especially in Generation Z. There are several things that influence decisions in investing, such as overconfidence bias, heuristics, and disposition effects. The study aims to determine and analyze the relationship between investor sentiment and behavioral biases, such as heuristics, overconfidence, and dispositional effects on the investment decisions of Generation Z members investors in West Java, and whether overconfidence bias and dispositional effects mediate heuristics and investment decisions of these investors. This research sample consists of 400 individual investor research subjects in West Java. The information obtained was later evaluated utilizing the PLS SEM method. The outcomes of this research indicate that heuristic bias, overconfidence, and disposition effects have a notable effect on investment decisions. Overconfidence bias and dispositional effects also substantially mediate the connection between heuristic bias and investment decisions. In addition, overconfidence bias and disposition effect together substantially mediate the connection between heuristic bias and investment decisions of Generation Z investors in West Java.