The Influence of Financial Self-Efficacy, Present Bias, and Overconfidence on Investment Decisions among Generation Z Investors
Keywords:
E-government Utilization, Information Accessibility, Public Trust, Service Responsiveness, Public Service SatisfactionAbstract
This study examines the influence of financial self-efficacy, present bias, and overconfidence on investment decisions among Generation Z investors. As young individuals increasingly participate in financial markets through digital investment platforms, understanding the psychological factors that shape their investment behavior has become increasingly important. Financial self-efficacy reflects individuals’ confidence in their ability to manage financial matters and make investment decisions, while present bias describes the tendency to prioritize immediate rewards over long-term benefits. Overconfidence refers to investors’ tendency to overestimate their knowledge, judgment, or ability to predict market movements. This study proposes a quantitative, explanatory research design using a structured questionnaire administered to Generation Z investors. The proposed data analysis employs partial least squares structural equation modeling (PLS-SEM) to evaluate the measurement model and test the relationships among the research variables. The results suggest that financial self-efficacy and overconfidence are positively associated with investment decisions, whereas present bias is negatively associated with investment decisions. These preliminary patterns provide a basis for examining how psychological characteristics may influence young investors’ financial choices. The study is expected to contribute to behavioral finance research and offer practical insights for financial educators, investment platform providers, and policymakers seeking to encourage informed and responsible investment behavior among Generation Z.
Downloads
References
Abideen, Z. U., Ahmed, Z., Qiu, H., & Zhao, Y. (2023). Do behavioral biases affect investors’ investment decision making? Evidence from the Pakistani equity market. Risks, 11(6), Article 109. https://doi.org/10.3390/risks11060109
Abdullah, H. A., Alzain, E., & Alshebami, A. S. (2022). The roles of financial literacy and overconfidence in investment decisions in Saudi Arabia. Frontiers in Psychology, 13, Article 1005075. https://doi.org/10.3389/fpsyg.2022.1005075
Ahmed, Z., Rasool, S., Saleem, Q., Khan, M. A., & Kanwal, S. (2022). Mediating role of risk perception between behavioral biases and investor’s investment decisions. SAGE Open, 12(2). https://doi.org/10.1177/21582440221097394
Almansour, B. Y., Elkrghli, S., & Almansour, A. Y. (2023). Behavioral finance factors and investment decisions: A mediating role of risk perception. Cogent Economics & Finance, 11(2). https://doi.org/10.1080/23322039.2023.2239032
Hair, J. F., Alamer, A. (2022). Partial least squares structural equation modeling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3), Article 100027. https://doi.org/10.1016/j.rmal.2022.100027
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2022). Partial least squares structural equation modeling (PLS-SEM) using R: A workbook. Springer. https://doi.org/10.1007/978-3-031-08764-0
Hidayat, F., Siregar, S. R., & Nugroho, A. W. (2023). Efek financial management behavior, self efficacy, herding terhadap keputusan investasi Generasi Z [Efek financial management behavior, self efficacy, herding terhadap keputusan investasi Generasi Z]. Akuntansi Bisnis & Manajemen, 30(1), 61–72. https://doi.org/10.35606/jabm.v30i1.1192
Kumar, P., Islam, M. A., Pillai, R., & Sharif, T. (2023). Analysing the behavioural, psychological, and demographic determinants of financial decision making of household investors. Heliyon, 9(2), Article e13085. https://doi.org/10.1016/j.heliyon.2023.e13085
Piehlmaier, D. M. (2023). The one-man show: The effect of joint decision-making on investor overconfidence. Journal of Consumer Research, 50(2), 426–446. https://doi.org/10.1093/jcr/ucac054
Published
How to Cite
Issue
Section
Copyright (c) 2026 Journal Management & Economics Review (JUMPER)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
