Cognitive Bias and Risk Preferences Analysis of Ponzi Scheme Investors
Maya Sari, Nugraha Nugraha
Available Online August 2016.
- https://doi.org/10.2991/gcbme-16.2016.23How to use a DOI?
- Overconfidence, Availability heuristic, Herding, Risk Tolerance
- The form of Ponzi scheme has evolved over many years and continues to change shape.The interesting phenomenon from such as Ponzi Scheme is that although many investors have lost their money, as publicized in the mass media, the case still continued until now. This study aims to gain an overview of cognitive bias, and risk preference. Furthermore, the relations between these factors and investment decisions of Ponzi Scheme Investors are also examined. The cognitive bias studied includes overconfidence, availability heuristic, and herding while the risk preference parameter used is risk tolerance. The respondents consisting of 115 Ponzi scheme investors, are taken using purposive sampling method. The verification analysis used is multiple linear regressions. The result shows that overconfidence, availability, herding and risk preference are the main principal basis in processing the information to make financial decisions. Overconfidence, availability heuristic, herding, and risk tolerance, have a positive and significance influence toward investment decision. Among the four variables, Overconfidence is the factor that has the greatest influence to the decision to invest This study hopefully will help investors to be aware of the impact of their own psychological factors in their investment decision.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Maya Sari AU - Nugraha Nugraha PY - 2016/08 DA - 2016/08 TI - Cognitive Bias and Risk Preferences Analysis of Ponzi Scheme Investors BT - 2016 Global Conference on Business, Management and Entrepreneurship PB - Atlantis Press SN - 2352-5428 UR - https://doi.org/10.2991/gcbme-16.2016.23 DO - https://doi.org/10.2991/gcbme-16.2016.23 ID - Sari2016/08 ER -