Proceedings of the 2016 Global Conference on Business, Management and Entrepreneurship

Cognitive Bias and Risk Preferences Analysis of Ponzi Scheme Investors

Authors
Maya Sari, Nugraha Nugraha
Corresponding Author
Maya Sari
Available Online August 2016.
DOI
https://doi.org/10.2991/gcbme-16.2016.23How to use a DOI?
Keywords
Overconfidence, Availability heuristic, Herding, Risk Tolerance
Abstract
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.

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Proceedings
2016 Global Conference on Business, Management and Entrepreneurship
Part of series
Advances in Economics, Business and Management Research
Publication Date
August 2016
ISBN
978-94-6252-268-8
ISSN
2352-5428
DOI
https://doi.org/10.2991/gcbme-16.2016.23How to use a DOI?
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  -