Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia

Research Article

Representativeness, Mental Accounting, Overconfidence and Loss Aversion On Investment Decision: Mediated by Risk Tolerance

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  • @INPROCEEDINGS{10.4108/eai.2-8-2023.2341066,
        author={Heni  Safitri and Mustaruddin  Mustaruddin and Wendy  Wendy and Giriati  Giriati},
        title={Representativeness, Mental Accounting, Overconfidence and Loss Aversion On Investment Decision: Mediated by Risk Tolerance},
        proceedings={Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia},
        publisher={EAI},
        proceedings_a={ICEB},
        year={2024},
        month={6},
        keywords={representativeness mental accounting overconfidence loss aversion investment decision risk tolerance},
        doi={10.4108/eai.2-8-2023.2341066}
    }
    
  • Heni Safitri
    Mustaruddin Mustaruddin
    Wendy Wendy
    Giriati Giriati
    Year: 2024
    Representativeness, Mental Accounting, Overconfidence and Loss Aversion On Investment Decision: Mediated by Risk Tolerance
    ICEB
    EAI
    DOI: 10.4108/eai.2-8-2023.2341066
Heni Safitri1,*, Mustaruddin Mustaruddin1, Wendy Wendy1, Giriati Giriati1
  • 1: Universitas Tanjungpura
*Contact email: B3081221002@student.untan.ac.id

Abstract

Risk tolerance mediated the relationship between investment decisions and the variables of representativeness, mental accounting, overconfidence, also loss aversion, which was the objective of this study. This is a survey-based investigation. A random sampling technique was employed to select 150 respondents for the sample in this research. Assessing the value of outer loading, validity and reliability, R square, path coefficients, specific indirect effects, and total effects through data analysis utilising SmartPLS. SEM (Structural Equation Model) analysis reveals that the overconfidence variable mediates a significant indirect impact of risk tolerance on investment decision. Besides, the investment decision is impact by the representativeness bias variable, which is mediated by risk tolerance.