The Investor Indonesia Behavior on Stock Investment Decision Making: Disposition Effect, Cognition and Accounting Information

Abstract

The purpose of this study was to investigate the influence of the disposition effect, the influence of aspects of cognition, the interaction effect of the disposition effect and cognitive aspects of the treatment of accounting information for investment decisions in the stock market. In order to better know the different levels of risk and the level of confidence in men or women in making decisions to invest in the stock market. The method uses a quasi-experimental study 2x2x2 Randomized Block (RB-222) ANOVA and ANCOVA Within-Subject Design. Block design is formed of many frequencies simulated stock trading using virtue trade program. Block most frequent transactions in block 1 and seldom frequent transaction undertake in block 8. The population of domestic individual investors and quasi experimental subjects consisted of 120 individual investors, 70 from Jakarta City, 33 from Semarang City, and 17 from Yogyakarta City. The results of this research showed there is a disposition effect before and after treatment of accounting information, there is a tendency to release their winner stock faster than losser stock. Aspects of cognition tend toward risk taker and overconfidence after a given treatment accounting information. There is interaction between the effects of dispositions, aspects of cognition (level of risk and level of confidence), and accounting information. These interactions give rise to behavioral neuroselling within the individual investor.

Keywords: investor behavior, disposition effect, level of risk, level of confidence, accounting information, quasi experiment, gender, neuro-selling behavior