UNTARUNTAR

International Journal of Application on Economics and BusinessInternational Journal of Application on Economics and Business

This research aims to explore the impact of investor personality traits towards overconfidence bias in investment behaviors. Additionally, it examines whether gender differences serve as a moderating factor. The study focuses on three main variables: personality traits, gender, and overconfidence bias. Data for the study is gathered through a primary data collection method using an online questionnaire, distributed via Google Forms. This questionnaire incorporates relevant indicators that effectively represent the variables under investigation and is disseminated across social media platforms, including WhatsApp, Facebook, Instagram, Twitter, and Telegram, to broaden respondent reach. The sample consists of individual stock investors in Indonesia, selected through non-probability sampling. For statistical analysis, Structural Equation Modeling is employed using the SmartPLS software, applying the Partial Least Squares (PLS-SEM) approach based on variance. The evaluation includes an Outer Model Assessment (validity and reliability testing) and an Inner Model Assessment, which involves R-square, Q-square, and Goodness of Fit tests, alongside hypothesis testing. According to this study, neuroticism and conscientiousness positively contribute to overconfidence bias in both genders, while openness has a negative effect on this bias among male and female investors alike. The findings of this study imply that understanding investors personality traits, such as neuroticism, conscientiousness, extraversion, and openness, is essential for tailoring investment strategies and mitigating overconfidence bias. Financial education focusing on self-awareness and emotional management is crucial to helping investors make more rational decisions and avoid unnecessary risks.

The study concludes that neuroticism, conscientiousness, and extraversion significantly influence overconfidence bias among Indonesian stock market investors.Importantly, gender does not moderate the relationship between personality traits and overconfidence, suggesting similar behavioral patterns in both men and women.These findings support behavioral finance and bounded rationality theories, highlighting the role of psychological factors in investment decision-making.

Future research should investigate the interplay between personality traits and specific investment strategies, such as value investing versus growth investing, to determine if certain personality types are more suited to particular approaches. Furthermore, exploring the impact of financial literacy levels on the relationship between personality and overconfidence could reveal whether education can mitigate biased decision-making. Finally, longitudinal studies tracking investors over time are needed to understand how personality traits and biases evolve with experience and market conditions, potentially identifying interventions to promote more rational investment behavior. These studies should incorporate a diverse range of Indonesian investors, including those from different socioeconomic backgrounds and levels of investment experience, to ensure the findings are broadly applicable and contribute to a more nuanced understanding of investor behavior in the Indonesian capital market. The research should also consider the influence of cultural factors and social norms on investment decisions, as these may interact with personality traits to shape investor behavior.

  1. EXPLORING HOW GENDER MODERATES THE EFFECT OF PERSONALITY TRAITS ON OVERCONFIDENCE BIAS AMONG INVESTORS... doi.org/10.24912/ijaeb.v3i3.1175-1188EXPLORING HOW GENDER MODERATES THE EFFECT OF PERSONALITY TRAITS ON OVERCONFIDENCE BIAS AMONG INVESTORS doi 10 24912 ijaeb v3i3 1175 1188
  2. Faktor Demografis, Personality Traits, dan Overconfidence (Survey Terhadap Investor Saham di Yogyakarta)... journal.uii.ac.id/index.php/JSB/article/view/5128Faktor Demografis Personality Traits dan Overconfidence Survey Terhadap Investor Saham di Yogyakarta journal uii ac index php JSB article view 5128
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