The Impact of Overconfidence, Disposition Effect, Representativeness, and Financial Knowledge on the Investment Satisfaction of Young Investors in Indonesia.

Annissyah Dwi Weizah Putri; Uray Ndaru Mustika; Giriati Giriati; Anggraini Syahputri

doi:10.61132/digitalinnovation.v2i2.362

Authors

Annissyah Dwi Weizah Putri Universitas Tanjungpura
Uray Ndaru Mustika Universitas Tanjungpura
Giriati Giriati Universitas Tanjungpura
Anggraini Syahputri Universitas Tanjungpura

DOI:

https://doi.org/10.61132/digitalinnovation.v2i2.362

Keywords:

Overconfidence, Disposition Effect, Representativeness, Financial Knowledge, Invesment Satisfaction, Young Investors Indonesia

Abstract

This study aims to analyze the influence of Overconfidence, Disposition Effect, Representativeness, and Financial Knowledge on Investment Satisfaction among young investors in Indonesia. The research sample consists of 252 young investors in Indonesia. The data analysis method used is SmartPLS 4.0. The research findings show that Overconfidence, Disposition Effect, and Financial Knowledge have a significant positive effect on Investment Satisfaction among young investors in Indonesia, whereas Representativeness does not have a significant effect. This study is expected to provide insights for young investors in Indonesia regarding investment satisfaction.

Downloads

Download data is not yet available.

References

Aldilawati, A., Pengaruh bias karakter investor individu terhadap pengambilan keputusan investasi melalui tipe investor sebagai variabel perantara dengan studi kasus di lingkungan Kanwil DJP Jateng I Direktorat Jenderal Pajak Kementerian Keuangan. Universitas Pancasakti, 2024.

Alhammadi, S., “Expanding financial inclusion in Indonesia through Takaful: opportunities, challenges and sustainability,” Journal of Financial Reporting and Accounting, 2023.

Arikunto, S., and Tanzeh, A., Metode Penelitian, vol. 43, pp. 22–34, 2020.

Colline, F., Rusmanto, T., Warganegara, D. L., and Hutagaol, Y. R. I., “Determinants of investment satisfaction among young investors in Indonesia,” Investment Management and Financial Innovations, vol. 21, no. 4, pp. 239–253, 2024. https://doi.org/10.21511/imfi.21(4).2024.19

Dewi, V. I., Febrian, E., Effendi, N., Anwar, M., and Nidar, S. R., “Financial literacy and its variables: The evidence from Indonesia,” Economics & Sociology, vol. 13, no. 3, pp. 133–154, 2020.

Hair, J. F., Risher, J. J., Sarstedt, M., and Ringle, C. M., “When to use and how to report the results of PLS-SEM,” European Business Review, vol. 31, no. 1, pp. 2–24, 2019.

Hakim, M. S., Setyaningrum, R. V., Yunita, R. D. S., and Nareswari, N., “Mitigating overconfidence bias in investment behavior: The roles of financial literacy and digital financial literacy,” EKUITAS (Jurnal Ekonomi Dan Keuangan), vol. 9, no. 1, pp. 82–96, 2025.

Hamada, M., “Commercialization of microfinance in Indonesia: The shortage of funds and the linkage program,” The Developing Economies, vol. 48, no. 1, pp. 156–176, 2010.

Hayat, A., and Anwar, M., “Impact of behavioral biases on investment decision; moderating role of financial literacy,” SSRN, 2016. [Online]. Available: https://ssrn.com/abstract=2848742

Jappelli, T., and Padula, M., “Investment in financial literacy and saving decisions,” Journal of Banking & Finance, vol. 37, no. 8, pp. 2779–2792, 2013.

Lusardi, A., “Financial literacy and the need for financial education: Evidence and implications,” Swiss Journal of Economics and Statistics, vol. 155, no. 1, pp. 1–8, 2019.

Nadhila, A., Sembel, R. S. R., and Malau, M., “The influence of overconfidence and risk perception on investment decisions: The moderating effect of financial literacy on individual millennial generation investors,” Eduvest - Journal of Universal Studies, vol. 4, no. 6, pp. 5280–5299, 2024.

Nofsinger, J. R., The Psychology of Investing. Routledge, 2017.

OJK, “Capital Markets Update December 2024,” Otoritas Jasa Keuangan, Feb. 25, 2025. [Online]. Available: https://iru.ojk.go.id/iru/dataandstatistics/detaildataandstatistics/13435/capital-markets-update-december-2024

Otaify, M., “Impact of behavioral biases, financial literacy, and decision-making processes on individual investors’ performance in the Egyptian Exchange,” SSRN, Jul. 31, 2023. [Online]. Available: https://ssrn.com/abstract=4526797

Panjaitan, H. P., Renaldo, N., and Suyono, S., “The influence of financial knowledge on financial behavior and financial satisfaction on Pelita Indonesia students,” Jurnal Manajemen Indonesia, vol. 22, no. 2, pp. 145–153, 2022. https://doi.org/10.25124/jmi.v22i2.3675

Paramita, M. P., and Wirakusuma, M. G., “How investment behaviour of young investors? A case study on the Indonesia Stock Exchange,” World Journal of Advanced Research and Reviews, vol. 23, no. 1, pp. 959–976, 2024. https://doi.org/10.30574/wjarr.2024.23.1.2072

Sihombing, Y., and Prameswary, R., “The effect of overconfidence bias and representativeness bias on investment decision with risk tolerance as mediating variable,” Indikator: Jurnal Ilmiah Manajemen Dan Bisnis, vol. 7, no. 1, pp. 1–12, 2023.

Sinaga, D., Buku Ajar Metodologi Penelitian (Penelitian Kualitatif). UKI Press, 2023.

Sohn, S.-H., Joo, S.-H., Grable, J. E., Lee, S., and Kim, M., “Adolescents’ financial literacy: The role of financial socialization agents, financial experiences, and money attitudes in shaping financial literacy among South Korean youth,” Journal of Adolescence, vol. 35, no. 4, pp. 969–980, 2012.

Sulhia, B. A., Handajani, L., and Surasni, N. K., “The effect of financial literacy, herding behaviour and overconfidence on investment decisions in the millennial generation,” Path of Science, vol. 8, no. 7, pp. 1030–1039, 2022.

Suriadi, A., Wibawa, A. D., and Hendratno, S. P., “The effect of financial literacy, investment decision, and overconfidence on mental accounting in the term of investing in cryptocurrency,” E3S Web of Conferences, vol. 426, p. 01047, 2023.

Wawrosz, P., and Schulz, B., “Overconfidence, representativeness and herding bias among German investors: How demographic and other variables influence their decision,” Ad Alta: Journal of Interdisciplinary Research, vol. 13, no. 2, 2023.

Wikartika, I., Evanthi, A., and Suwaidi, R. A., “Investment decision making with investment satisfaction as an intervening variable: Availability bias and financial literacy,” JBMP (Jurnal Bisnis, Manajemen dan Perbankan), vol. 9, no. 1, pp. 12–24, 2023.

Yogasnumurti, R. R., Sadalia, I., and Irawati, N., “The effect of financial attitude and financial knowledge on personal financial management of university students moderated by gender,” International Journal of Research and Review, vol. 7, no. 2, pp. 219–229, 2020.

Yusbardini, Y., and Natsir, K., “Investor bias behavior in investment decision making,” in Tenth International Conference on Entrepreneurship and Business Management 2021 (ICEBM 2021), pp. 424–428, 2022.