Herding and overconfidence to investment decisions: Evidence from stock and cryptocurrency investors in Indonesia

Ningtyas, Mega Noerman ORCID: https://orcid.org/0000-0002-9509-3419, Kusuma, Avicenna Raihan and Hafizi, Riza (2026) Herding and overconfidence to investment decisions: Evidence from stock and cryptocurrency investors in Indonesia. Diponegoro International Journal of Business, 9 (1). pp. 1-12. ISSN 2580-4995

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Abstract

This study examines how herding behavior and overconfidence influence investment decisions among stock and cryptocurrency investors. The rapid growth of retail participation in both markets raises concerns about the role of behavioral biases in shaping investors’ decision-making processes. Prior studies have explored these biases within individual markets, but there is limited empirical evidence directly comparing their effects across stock and cryptocurrency investors. Using a quantitative approach, data were collected from 442 investors in Indonesia through a structured questionnaire measured on a five-point Likert scale. The data were analyzed using Structural Equation Modeling with Partial Least Squares (SEM-PLS) and Multi-Group Analysis to compare stock and cryptocurrency investors. The results show that both herding behavior and overconfidence positively influence investment decisions. Multi-group analysis reveals that the effect of herding behavior differs significantly between stock and cryptocurrency investors, while the effect of overconfidence does not differ between the two markets. These findings highlight the important role of behavioral biases in investment decision-making and suggest that improving investors’ awareness of psychological biases may help promote more rational investment behavior in financial markets.

Item Type:	Journal Article
Keywords:	herding; overconfidence; stocks; cryptocurrency; investment decision; MGA
Subjects:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1503 Business and Management
Divisions:	Faculty of Economics > Department of Management
Depositing User:	Mega Noerman Ningtyas
Date Deposited:	15 Jul 2026 22:59

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