Herding Behavior and Risk Perception: Psychological Determinants of Investment Choices in Emerging Markets
Dublin Core
Title
Herding Behavior and Risk Perception: Psychological Determinants of Investment Choices in Emerging Markets
Creator
Tina Lestari, Le Hoai Nam, Muhammmad Mawahib Ahmadi
Proceedings Item Type Metadata
meta_title
Herding Behavior and Risk Perception: Psychological Determinants of Investment Choices in Emerging Markets
Abstract/Description
This research investigates the influence of behavioral factors—overconfidence, risk aversion, and herding behavior—on investment decision-making. Anchored in the principles of behavioral finance, the study emphasizes the psychological underpinnings that drive financial behavior beyond traditional rational models. Using a quantitative approach with a sample of 110 investors in Indonesia, the findings reveal that herding behavior exerts the strongest positive impact on investment decisions, highlighting the pivotal role of social influence in financial markets. Risk aversion also significantly shapes investment choices, indicating that investors with a higher tendency to avoid risk prefer more secure and stable assets. Meanwhile, overconfidence, though positively associated with investment decision-making, demonstrates a comparatively smaller effect. These results underscore the necessity for interventions aimed at improving investors' critical thinking and reducing susceptibility to cognitive and emotional biases. The study contributes to the growing body of literature on behavioral finance by offering empirical evidence on how individual psychological traits affect investment behavior in emerging markets. Future research is encouraged to expand the model by incorporating variables such as financial literacy, emotional intelligence, and market sentiment.
publication_date
2025/06/20
pdf_url
https://insyma.org/proceedings/files/articles/Tina Lestari.pdf
abstract_html_url
https://insyma.org/proceedings/items/show/494
keywords
Behavioral Finance; Investment Decision-Making; Overconfidence; Risk Aversion; Herding Behavior
firstpage
1128
lastpage
1133
issn
3047-857X
conference
Proceedings of the International Symposium on Management (Volume 21, 2024)
Volume
22
publisher_name
Fakultas Bisnis dan Ekonomika, Universitas Surabaya
no article
182
Files
Citation
Tina Lestari, Le Hoai Nam, Muhammmad Mawahib Ahmadi, “Herding Behavior and Risk Perception: Psychological Determinants of Investment Choices in Emerging Markets,” Proceedings of the International Symposium on Management (INSYMA), accessed July 22, 2025, https://insyma.org/proceedings/items/show/494.