Deciphering Investment Decision in Fintech: The Role of Behavioral Bias and Risk Perception
Keywords: Investment decision, Financial technology, Behavioral bias, Risk Perception
Abstract
Purpose – This study aimed to investigate the effect of behavioral biases on Indonesian investors using fintech platforms. The roles of blue-chip stock, availability, herding, and overconfidence bias, as well as disposition effect on investment decisions, were examined both directly and indirectly through risk perception.
Methodology – Data were collected via stributing online surveys to over 360 investors between November 2023 and January 2024. Structural Equation Model analysis method was used to evaluate the data.
Results – Availability and blue-chip stock biases positively influence investment decisions and risk perception, while herding bias is insignificant. Overconfidence bias and disposition effect significantly affect risk perception but not investment decisions. Risk perception mediates the significant effects of availability and blue-chip stock biases on investment decisions.
Originality – The study explores the unique role of fintech platforms in shaping investment decisions, extending beyond traditional analyses of investor psychology. Prospect theory was applied as a theoretical lens to examine the effect of specific behavioral biases on investment decisions and risk perception within the Indonesian fintech context.
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References
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