The Influence of Herding Behavior and Confirmation Bias on Investment Decision in Generation Z with Gender as Moderating Variable
The Influence of Herding Behavior and Confirmation Bias on Investment Decision in Generation Z with Gender as Moderating Variable
Abstract
In the digital era, access to investment information has become easier, especially through social media actively used by Generation Z. However, in making investment decisions, they can become more vulnerable to two biases known as herding behavior, which is the tendency to follow the actions of others, and confirmation bias, which is the tendency to seek information that reinforces their own views. This study aims to examine the influence of herding behavior and confirmation bias on investment decisions in Generation Z, with gender as a moderating factor. The population in this study is all Generation Z investors who are students of the Faculty of Economics and Business at Universitas Klabat, with sample selection using purposive sampling, resulting in 83 samples. The data used in this study is primary data, obtained from the distribution of questionnaires. This research uses linear regression to test the influence of research variables. The results of hypothesis testing indicate that herding behavior does not have a significant effect on the investment decisions of Generation Z, while confirmation bias has a significant effect. Additionally, gender does not moderate the relationship between herding behavior and investment decisions, nor between confirmation bias and investment decisions in Generation Z.
References
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Shah, A. K., & Oppenheimer, D. M. (2008). Heuristics made easy: an effort-reduction framework. American Psychological Association, 134(2), 207–222. https://doi.org/https://doi.org/10.1037/0033-2909.134.2.207
Shefrin, H. (2002). Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing. Oxford University Press. https://doi.org/https://doi.org/10.1093/0195161211.001.0001
Shefrin, H., & Statman, M. (2003). The contributions of daniel kahneman and amos tversky. The Journal of Behavioral Finance, 4(2), 54–58. https://doi.org/https://doi.org/10.1207/S15427579JPFM0402_01
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Simon, H. A. (2000). Bounded rationality in social science: today and tomorrow. Mind & Society, 1(1), 25–39. https://doi.org/https://doi.org/10.1007/BF02512227
Singh, A. P., & Dangmei, J. (2016). Understanding the generation z: the future workforce. South -Asian Journal of Multidisciplinary Studies (SAJMS), 3(3), 1–5.
Smart, S. B., & Zutter, C. J. (2020). Fundamentals of Investing. Pearson.
Statman, M. (1995). Behavioral finance versus standard finance. https://doi.org/https://doi.org/10.2469/cp.v1995.n7.4
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Thaler, R. H. (2015). Misbehaving: The Making of Behavioral Economics. W W Norton & Co.
Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: heuristics and biases. American Association for the Advancement of Science, 185(4157), 1124–1131.
Waweru, N. M., Munyoki, E., & Uliana, E. (2008). The effects of behavioural factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange. International Journal of Business and Emerging Markets, 1(1), 24–41. https://doi.org/https://doi.org/10.1504/IJBEM.2008.019243
Zimmer, F., Scheibe, K., Stock, M., & Stock, W. G. (2019). Fake news in social media: bad algorithms or biased users? Journal of Information Science Theory and Practice, 7(2), 40–53. https://doi.org/https://doi.org/10.1633/JISTaP.2019.7.2.4
Armansyah, R. F. (2023). Herd instinct bias, emotional biases, and information processing biases in investment decisions. Jurnal Manajemen Dan Kewirausahaan, 24(2), 105–117. https://doi.org/https://doi.org/10.9744/jmk.24.2.105-117
Bales, R. F., & Parsons, T. (2013). Family: Socialization and Interaction Process. Routledge. https://doi.org/https://doi.org/10.4324/9781315824307
Bazerman, M. H., & Moore, D. A. (2012). Judgment in Managerial Decision Making. John Wiley & Sons, Inc.
Bussey, K., & Bandura, A. (1999). Social cognitive theory of gender development and differentiation. Psychology
Review, 106(4), 676–713. https://doi.org/https://doi.org/10.1037/0033-295X.106.4.676
Cheng, C. (2018). Confirmation bias in investments. International Journal of Economics and Finance, 11(2), 50.
https://doi.org/https://doi.org/10.5539/IJEF.V11N2P50
Dhami, S., & Sunstein, C. R. (2022). Bounded Rationality: Heuristics, Judgment, and Public Policy. Westchester Publishing Services.
Fama, E. F. (1965). The behavior of stock-market prices. The Journal of Business, 38(1), 34–105. https://www.jstor.org/stable/2350752
Gay, L. R., Mills, G. E., & Airasian, P. W. (2012). Educational Research : Competencies for Analysis and Applications. Pearson.
Hofstede, G. (1986). Cultural differences in teaching and learning. International Journal of Intercultural Relations, 10(3), 301–320. https://doi.org/https://doi.org/10.1016/0147-1767(86)90015-5
Holmes, R. (2016, August 12). The problem isn’t fake news, it’s bad algorithms—here’s why. Observer. https://observer.com/2016/12/the-problem-isnt-fake-news-its-bad-algorithms-heres-why/
Jaiswal, B., & Kamil, N. (2012). Gender, behavioral finance and the investment decision. Business Review, 7(2), 8–22. https://doi.org/https://doi.org/10.54784/1990-6587.1201
Kahneman, D., & Frederick, S. (2002). Representativeness revisited: attribute substitution in intuitive judgment. New York: Cambridge University Press, 49(1), 49–81. https://doi.org/http://dx.doi.org/10.1017/CBO9780511808098.004
Kahneman, D., & Tversky, A. (2013). Prospect Theory: An Analysis of Decision Under Risk. In Handbook of The Fundamentals of Financial Decision Making (pp. 99–127). World Scientific.
https://doi.org/https://doi.org/10.1142/9789814417358_0006
Mallard, G. (2015). Bounded Rationality and Behavioural Economics. Routledge. https://doi.org/https://doi.org/10.4324/9781315764290
Otuteye, E., & Siddiquee, M. (2015). Overcoming cognitive biases: a heuristic for making value investing decisions. The Journal of Behavioral Finance, 16(2), 140–149. https://doi.org/https://doi.org/10.1080/15427560.2015.1034859
Parikh, P. (2009). Value Investing and Behavioral Finance. McGraw-Hill Education Pvt Limited.
Park, B.-J., & Kim, M.-J. (2017). A dynamic measure of intentional herd behavior in financial markets. National Research Foundation of Korea Grant, 1–34. https://mpra.ub.uni-muenchen.de/id/eprint/82025
Phuoc Luong, L., & Thi Thu Ha, D. (2011). Behavioral factors influencing individual investors´ decision-making and performance. : a survey at the Ho Chi Minh stock exchange. Digitala Vetenskapliga Arkivet, 1–114. https://www.diva-portal.org/smash/get/diva2:423263/FULLTEXT02.pdf
Pompian, M. M. (2012). Behavioral Finance and Investor Types: Managing Behavior to Make Better Investment Decisions. John Wiley & Sons.
Puspitawati, H. (2013). Konsep, Teori dan Analisis Gender.
Putri, F. A., & Mulyani, E. (2023). Analisis perbedaan perilaku investasi saham antara wanita dan pria di pasar modal Indonesia. Jurnal Eksplorasi Akuntansi (JEA), 5(3), 978–998. https://doi.org/https://doi.org/10.24036/jea.v5i3.752
Rahayu, S., Rohman, A., & Harto, P. (2021). Herding behavior model in investment decision on emerging markets: experimental in Indonesia. Journal of Asian Finance, Economics and Business, 8(1), 53–59. https://doi.org/10.13106/jafeb.2021.vol8.no1.053
Roberts, J., Yaya, L., & Manolis, C. (2014). The invisible addiction: cell-phone activities and addiction among male and female college students. Journal of Behavioral Addictions, 3(4), 1–12. https://doi.org/https://doi.org/10.1556/jba.3.2014.015
Rosdiana, R. (2020). Investment behavior in generation z and millennial generation. Dinasti International Journal of Economics, Finance and Accounting, 1(5), 766–780. https://doi.org/https://doi.org/10.38035/dijefa.v1i5.595
Rose, J. B. D., & Armansyah, R. F. (2022). Recency bias dan confirmation bias pada keputusan investasi investor pasar modal Indonesia. Jurnal Ilmiah Manajemen Dan Bisnis (JIMBis), 1(2), 136–152. https://doi.org/https://doi.org/10.24034/jimbis.v1i2.5366
Rudin, A. (2019). Understanding how social media affects investor biases. Investments & Wealth Institute, Formerly IMCA, 40–43. https://cdn2.hubspot.net/hubfs/4812204/IWM19SepOct-SocialMediaAffectsInvestorBiases.pdf
Schiffer, Z. (2019, November 12). Networks, ‘filter bubble’ author Eli Pariser on why we need publicly owned social. The Verge. https://www.theverge.com/interface/2019/11/12/20959479/eli-pariser-civic-signals-filter-bubble-q-a
Shah, A. K., & Oppenheimer, D. M. (2008). Heuristics made easy: an effort-reduction framework. American Psychological Association, 134(2), 207–222. https://doi.org/https://doi.org/10.1037/0033-2909.134.2.207
Shefrin, H. (2002). Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing. Oxford University Press. https://doi.org/https://doi.org/10.1093/0195161211.001.0001
Shefrin, H., & Statman, M. (2003). The contributions of daniel kahneman and amos tversky. The Journal of Behavioral Finance, 4(2), 54–58. https://doi.org/https://doi.org/10.1207/S15427579JPFM0402_01
Sidik, S. (2021, March 3). Bali united bantah kaesang jadi investor, saham bola drop! CNBC Indonesia. https://www.cnbcindonesia.com/market/20210303122552-17-227519/bali-united-bantah-kaesang-jadi-investor-saham-bola-drop
Simon, H. A. (2000). Bounded rationality in social science: today and tomorrow. Mind & Society, 1(1), 25–39. https://doi.org/https://doi.org/10.1007/BF02512227
Singh, A. P., & Dangmei, J. (2016). Understanding the generation z: the future workforce. South -Asian Journal of Multidisciplinary Studies (SAJMS), 3(3), 1–5.
Smart, S. B., & Zutter, C. J. (2020). Fundamentals of Investing. Pearson.
Statman, M. (1995). Behavioral finance versus standard finance. https://doi.org/https://doi.org/10.2469/cp.v1995.n7.4
Sugiyono, P. D. (2019). Metode Penelitian Pendidikan (Kuantitatif, Kualitatif, Kombinasi, R&D dan Penelitian Pendidikan). In Metode Penelitian Pendidikan. Alfabeta.
Sujarweni, V. W. (2015). Metodologi Penelitian Bisnis & Ekonomi. Pustaka baru press.
Tandelilin, E. (2010). Dasar-Dasar Manajemen Investasi. In Manajemen Investasi (pp. 1–34). https://pustaka.ut.ac.id/lib/wp-content/uploads/pdfmk/EKMA5312-M1.pdf
Thaler, R. H. (2015). Misbehaving: The Making of Behavioral Economics. W W Norton & Co.
Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: heuristics and biases. American Association for the Advancement of Science, 185(4157), 1124–1131.
Waweru, N. M., Munyoki, E., & Uliana, E. (2008). The effects of behavioural factors in investment decision-making: a survey of institutional investors operating at the Nairobi Stock Exchange. International Journal of Business and Emerging Markets, 1(1), 24–41. https://doi.org/https://doi.org/10.1504/IJBEM.2008.019243
Zimmer, F., Scheibe, K., Stock, M., & Stock, W. G. (2019). Fake news in social media: bad algorithms or biased users? Journal of Information Science Theory and Practice, 7(2), 40–53. https://doi.org/https://doi.org/10.1633/JISTaP.2019.7.2.4
Published
2024-09-30
How to Cite
RUNTUWENE, Maria Ester; SIBILANG, Novie P.
The Influence of Herding Behavior and Confirmation Bias on Investment Decision in Generation Z with Gender as Moderating Variable.
Klabat Accounting Review, [S.l.], v. 5, n. 2, p. 111-122, sep. 2024.
ISSN 2722-7278.
Available at: <https://ejournal.unklab.ac.id/index.php/kar/article/view/1128>. Date accessed: 14 dec. 2024.
doi: https://doi.org/10.60090/kar.v5i2.1128.111-122.
Section
Articles
This work is licensed under a Creative Commons Attribution 4.0 International License.
