The Impact of Behavioral Biases on Stock Investment Decisions with Investor Type as a Moderating Variable: A Case Study of Investors in North Sumatra

Abstract

The objective of this study is to determine and analyze the influence of Overconfidence Bias, Representative Bias, Herding Bias, Disposition Effect, and Anchoring Bias on Investment Decisions, with Investor Type as a moderating variable, among investors in North Sumatra. Using purposive sampling, there are 235 valid respondents and data analyzed using SmartPLS. The study’s results indicate that Overconfidence Bias, Representative Bias, Herding Bias, Disposition Effect, and Anchoring Bias have a positive and significantly effects on investment decisions. Meanwhile, Representative Bias, when moderated by Investor Type, has a negative effect on investment decisions. Anchoring Bias, when moderated by Investor Type, has a positive and significantly effects on investment decisions. Overconfidence Bias, Herding Bias, and Disposition Effect, when moderated by Investor Type, do not significantly affect investment decisions of investors residing in North Sumatra. Keywords: Overconfidence, Representative, Herding, Disposition Effect, Anchoring Bias, Investment Decision, Investor Type.