The Influence of Representativeness Bias and Hearding Effect on Investment Decisions in the Capital Market

Authors

  • Muhammad Ikhsan Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta
  • Sri Handoko Sakti Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta
  • M Natser Abdoellah Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta
  • Junaidi Hendro Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta

DOI:

https://doi.org/10.61536/escalate.v2i01.45

Keywords:

Representativeness Bias, Herding Effect, Heuristic Theory

Abstract

This research aims to explore the influence of representativeness bias and herding effect behavior on rational investment decisions in the capital market. Quantitative methods were used involving 100 investors who were members of the Beginner Stock Investor (ISP) community in Jakarta. The results of the analysis show that representativeness bias and herding effect behavior have a significant influence on rational investment decisions. These findings highlight the importance of awareness of the psychological factors that influence investor behavior in making investment decisions, as well as the need for a more independent and focused approach to fundamental analysis to ensure more appropriate and optimal investment decisions. The practical implication of this research is that a better understanding of investor behavior and its impact on markets can help investors to overcome these biases and improve the quality of their investment decisions.

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Published

2024-05-20

How to Cite

Ikhsan, M., Handoko Sakti, S., Natser Abdoellah, M., & Hendro, J. (2024). The Influence of Representativeness Bias and Hearding Effect on Investment Decisions in the Capital Market. Escalate : Economics and Business Journal, 2(01), 1–8. https://doi.org/10.61536/escalate.v2i01.45

Issue

Vol. 2 No. 01 (2024)

Section

Articles

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Copyright (c) 2024 Muhammad Ikhsan, Sri Handoko Sakti, M Natser Abdoellah

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