DETERMINANTS OF RISK TAKING BEHAVIOR

Title: DETERMINANTS OF RISK TAKING BEHAVIOR

Author: GESTI MEMARISTA

Item Type : Thesis (Thesis)

Affiliations: Master of Management Science Study Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

Investors can invest in various types of assets. The choice of asset type by investors will indicate risk taking behavior. Predicting risk taking behavior is very important for investors and investment advisors, because investor behavior may not always be rational for making investment decisions. By knowing risk taking behavior, each individual will be able to gain a competitive advantage according to cognitive psychology which plays a role in selecting investment assets. This research aims to analyze the determinants of risk taking behavior in the financial domain (stocks). The dependent variable of the research is risk taking behavior. The research's independent variables are subjective financial risk attitude, risk perception, miscalibration, and overoptimism. The research control variables are age, gender, familiarity of investments, and financial knowledge. The research was carried out with a survey research design by distributing hardcopy and softcopy questionnaires via Google Docs. The respondents of this research were 130 stock investors from Surabaya. The stock sample used in this research is BMRI (PT Bank Mandiri Tbk) shares. This research method uses multiple linear regression. The results of this study show that subjective financial risk attitude, overoptimism, familiarity of investments, and financial knowledge have a significant positive effect on risk taking behavior. Furthermore, risk perception and age have a significant negative effect on risk taking behavior, while miscalibration and gender do not have a significant effect on risk taking behavior.

Keywords: risk taking behavior, subjective financial risk attitude, risk perception, miscalibration, overoptimism, sociodemographic factors

Sources: http://repository.unair.ac.id/39040/