The Effect of Overconfidence Bias, Herding Bias, and Regret Aversion Bias on Generation Z Investment Decision Making in Surabaya with Moderation in the Use of Artificial Intelligence

Sheila Syam Ibrahim; Nunik Dwi Kusumawati

doi:10.55927/ijabm.v4i5.620

Authors

Sheila Syam Ibrahim Surabaya State University
Nunik Dwi Kusumawati Surabaya State University

DOI:

https://doi.org/10.55927/ijabm.v4i5.620

Keywords:

Overconfidence Bias, Herding Bias, Regret Aversion Bias, Artificial Intelligence

Abstract

This study aims to analyze the influence of overconfidence bias, herding bias, and regret aversion bias on investment decisions of Generation Z in Surabaya using artificial intelligence (AI) as a moderating variable. The background of this study is based on the phenomenon of increasing participation of Generation Z in digital investment which is susceptible to behavioral bias despite being supported by AI-based technology. This study uses a quantitative method with a Structural Equation Modeling (SEM) approach and involved 400 Generation Z respondents in Surabaya. The results show that overconfidence bias and regret aversion bias have no significant effect on investment decisions, while herding bias has a positive and significant effect. Meanwhile, AI has a significant effect on investment decisions, but is unable to moderate the relationship between behavioral bias and investment decisions. This finding indicates that AI acts as an independent factor that directly strengthens the quality of investment decisions, rather than as a counterweight to behavioral bias. The results of this study contribute to the development of modern behavioral finance theory and have practical implications for the development of more objective investment technology

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