Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022)

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The Moderating Role of Locus of Control on the Links Between Availability Bias, Herding, and Investment Decisions

Authors
Febria Nalurita1, *, Farah Margaretha Leon1, Yosephina Endang Purba1, Kristian Chandra1
1Department of Management, Faculty of Economics and Business, Universitas Trisakti, Grogol, Jakarta, Indonesia
*Corresponding author. Email: febria.nalurita@trisakti.ac.id
Corresponding Author
Febria Nalurita
Available Online 10 January 2024.
DOI
10.2991/978-94-6463-350-4_27How to use a DOI?
Keywords
Availability Bias; Herding; Investment Decision; Locus of Control
Abstract

This study aims to determine the effect of availability bias and herding on investment decision-making with the moderating role of locus of control. Data was collected by distributing questionnaires to individual investors on the Jakarta Indonesia Stock Exchange (IDX), with a sample of 281 people. This study uses the Structural Equation Modeling (SEM)-LISREL 8.8 approach. This study finds that availability bias and herding significantly affect investment decision-making. Locus of control plays a moderating role between availability and herding bias in investment decision-making. This research helps individual investors understand the existence of rational or irrational behavior, analyze all the information available in the market, and always verify the data received so that investors have the knowledge and can act rationally before making investment decisions.

Meanwhile, policymakers can conduct investment training and awareness programs, conduct research for individual investors more intensively, and develop information networks to facilitate investors’ information needs. The limitation of this study is that it only investigates individual investors. For further research, institutional investors could be tested to explore the behavior of institutional investors moderated by locus of control.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
10 January 2024
ISBN
978-94-6463-350-4
ISSN
2352-5428
DOI
10.2991/978-94-6463-350-4_27How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Febria Nalurita
AU  - Farah Margaretha Leon
AU  - Yosephina Endang Purba
AU  - Kristian Chandra
PY  - 2024
DA  - 2024/01/10
TI  - The Moderating Role of Locus of Control on the Links Between Availability Bias, Herding, and Investment Decisions
BT  - Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022)
PB  - Atlantis Press
SP  - 290
EP  - 299
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-350-4_27
DO  - 10.2991/978-94-6463-350-4_27
ID  - Nalurita2024
ER  -