Investor Behavior and Investment Returns: Mediating Impact of Risk Tolerance in Indonesian Technology Stocks

Rifqi Amrulloh (), Adista Anjar Diany, Muhammad Refa Aria Pratama and Muhammad Reyva Akhsanio
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Rifqi Amrulloh: Pancasetia School of Economics
Adista Anjar Diany: Pancasetia School of Economics
Muhammad Refa Aria Pratama: Pancasetia School of Economics
Muhammad Reyva Akhsanio: Pancasetia School of Economics

A chapter in Proceedings of the International Conference on Contemporary Risk Studies (ICONIC-RS 2025), 2026, pp 265-277 from Springer

Abstract: Abstract This study aims to analyze the influence of overconfidence bias and Herding behavior on the investment decisions of individual investors in the technology sub-sector on the Indonesia Stock Exchange (IDX), with Risk tolerance as a mediating variable. The rapid growth of individual investors, dominated by millennials and Gen Z with easy digital access, is not always accompanied by rational investment decisions. This quantitative research uses a survey method with a Likert scale questionnaire distributed to individual investors in Banjarmasin who invest in technology stocks. Data analysis uses path analysis to test the direct and indirect effects of the variables. The findings indicate that overconfidence bias and Herding behavior significantly influence investment decisions. Furthermore, Risk tolerance acts as a partial mediator in the relationship between these two behavioral biases and investment decisions. This research contributes to the development of behavioral finance literature, especially in the dynamic context of the technology sector in Indonesia, and provides practical implications for investors and capital market regulators.

Keywords: Overconfidence Bias; Herding behavior; Risk tolerance; Investment Decision; Behavioral Finance (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-2-38476-595-9_21

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DOI: 10.2991/978-2-38476-595-9_21

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