OVERCONFIDENCE, REGRET AVERSION, LOSS AVERSION, AND HERDING BEHAVIOR: AN ANALYSIS OF INVESTMENT DECISION MAKING AMONG GENERATION Z STUDENTS

Abstract

This research focuses on investigating the impact of behavioral biases on investment decision making in Generation Z students. The study examines the influence of overconfidence, regret aversion, loss aversion, and herding behavior on investment decisions, and the moderating role of risk perception in this relationship. The data for this research were collected through a questionnaire-based survey from 120 respondents who were Generation Z students from the Faculty of Economics and Business, Muhammadiyah University of Surakarta, Central Java, Indonesia. The Partial Least Squares method was used for data analysis. The results of the study revealed that overconfidence has a significant positive impact on investment decision making [3] while regret aversion, loss aversion, herding behavior, and risk perception have a non-significant effect. These results indicate that the overconfidence bias plays a crucial role in investment decision making among Generation Z students. The study also highlights the importance of considering the moderating effect of risk perception while analyzing the impact of behavioral biases on investment decisions.The study adds to the growing literature on behavioral finance and its implications for the capital markets. The findings can be useful for investors, financial advisors, and policymakers to develop effective strategies for investment decision making. By understanding the behavioral biases of Generation Z students, it can be possible to encourage them to make informed investment decisions that are based on rational analysis rather than their emotional biases