Title:
THE EFFECT OF OVERCONFIDENCE, RISK TOLERANCE, HERDING BEHAVIOR, AND LOSS AVERSION ON INVESTMENT DECISION IN THE CAPITAL MARKET

Authors:
Irna Wardani*, Faisal and A Sakir, Indonesia

Abstract:
This study investigates the impact of overconfidence, risk tolerance, herding behavior, and loss aversion on investment decision. It utilizes an analytical approach, employing surveys as the primary research method. The study's population consists of all undergraduate entrepreneurial students from semesters 6 to 8 of the 2020-2023 cohort at the Faculty of Economics and Business at Syiah Kuala University (FEB-USK). The findings show that students' overconfidence, risk tolerance, herding behavior, and loss aversion have a negative and significant impact on their investment decision. This highlights that the ideal investment decision model for students encourages a balanced approach, consisting of one that avoids overconfidence, embraces prudent risk tolerance, steers clear of herding behavior, and mitigates excessive loss aversion.