The Influence of Loss Aversion and Overconfidence on Generation Z Investment Decisions Moderated by Financial Literacy
Keywords:
Loss Aversion, Overconfidence, Financial Literacy
Abstract
The rapid development of digital technology in the Industrial Revolution 5.0 era has increased investment participation among Generation Z, particularly through digital investment platforms. However, investment decisions are often influenced by behavioral biases, such as loss aversion and overconfidence. Previous studies have reported inconsistent findings regarding the effects of these biases on investment decisions, indicating the need for further investigation. Therefore, this study aims to analyze the influence of loss aversion and overconfidence on investment decisions among Generation Z in Makassar City and to examine the moderating role of financial literacy. This study employed a quantitative approach with an associative research design. The sample consisted of 170 Generation Z investors selected through purposive sampling. Data were collected using an online questionnaire with a Likert scale and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The results show that loss aversion and overconfidence significantly influence investment decisions among Generation Z in Makassar City. Furthermore, financial literacy significantly moderates the relationship between loss aversion, overconfidence, and investment decisions. These findings contribute to behavioral finance literature by highlighting the important role of financial literacy in promoting more rational, cautious, and risk-appropriate investment decisions among Generation Z investors.
References
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Kumalasari, P., & Prajawati, M. I. (2025). Financial literacy as moderation between overconfidence, loss aversion, fear of missing out, and investment decision. Jurnal Fokus Manajemen Bisnis, 15(2), 269–287.
Limarus, V. H., & Pamungkas, A. (2023). Pengaruh herding behavior, loss aversion, dan financial literacy terhadap investment decision. Jurnal Muara Ilmu Ekonomi dan Bisnis, 7(2), 389–401.
Listiani, E., & Soleha, E. (2023). Literasi keuangan, risk tolerance dan overconfidence terhadap keputusan investasi pada pekerja di kawasan industri Cikarang. Journal of Management and Business, 5(2), 983–993.
Mahmood, F., Arshad, R., Khan, S., Afzal, A., & Bashir, M. (2024). Impact of behavioral biases on investment decisions and the moderation effect of financial literacy. Acta Psychologica, 247, 104303.
Mujianah, S., Anita, S. Y., & Ermawati, L. (2025). Pengaruh literasi keuangan, overconfidence, loss aversion dan herding bias terhadap keputusan investasi di Indeks Saham Syariah Indonesia dalam perspektif bisnis Islam. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi, 9(2), 625–654.
OJK. (2025). Pengelolaan Investasi. Otoritas Jasa Keuangan.
Rinjani, A. C., & Darussalam, M. R. (2024). Investasi di era digital: Peluang dan tantangan di pasar modal. Jurnal Media Akademik, 2(12).
Shefrin, H. (2018). Behavioral Corporate Finance: Concepts and Cases for Teaching Behavioral Finance (2nd ed.). McGraw-Hill Education.
Sidayang, S., Turu' Allo, M. H., Tiwa, A. S., Pangemanan, N., Harefa, J. P., & Abner. (2024). Pengaruh perkembangan teknologi di era digital terhadap investasi dan pasar modal. Social Science, 12(2), 162–166.
Sri Wahyu Diastuti. (2024). Pegawai swasta dominasi pemilik SID di pasar modal Sulsel sebesar 38.271 rekening. SULSELSATU.com.
Sugiyono. (2017). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta.
Tandelilin, E. (2010). Portofolio dan Investasi: Teori dan Aplikasi. Kanisius.
Tubastuvi, N., Azzahara, C. T. M., Purwidianti, W., & Bagis, F. (2024). Analisis pengaruh risk perception, risk tolerance, overconfidence, dan loss aversion terhadap keputusan investasi Generasi Milenial. Ecobisma (Jurnal Ekonomi, Bisnis dan Manajemen), 11(1), 62–76.
Tyas, A. S., & Fathmaningrum, E. S. (2024). The influence of financial literacy and loss aversion on investment decision making with financial behavior as a moderation variable. Proceedings Pekan Ilmiah Mahasiswa Akuntansi, 4, 1–17.
Usriyono, E., & Wahyudi, S. (2023). The investment decision of millennial generation: An analysis using financial literacy and financial behavior. Corporate Governance and Organizational Behavior Review, 7(2), 8–14.
Adil, M., Singh, Y., & Ansari, M. S. (2022). How financial literacy moderate the association between behaviour biases and investment decision? Asian Journal of Accounting Research, 7(1), 17–30. https://doi.org/10.1108/AJAR-09-2020-0086
Adiputra, I. G., Bangun, N. A., & Jullian, R. B. (2023). The effect of overconfidence bias, herding behavior and experienced regret on investment decision making on the Indonesia Stock Exchange. Journal of Economics, Finance and Management Studies, 6(5), 2339–2348.
Adwitiya, R., & Abdurrahman, A. (2025). Pengaruh financial literacy terhadap investment decision. AKUA: Jurnal Akuntansi dan Keuangan, 4(2), 203–211.
Afiani, M. Z., Rahmawati, I. Y., Tubastuvi, N., & Utami, R. F. (2024). Analysis of factors that influence millennial and Generation Z investment decisions. Formosa Journal of Multidisciplinary Research, 3(9), 3269–3286. https://doi.org/10.55927/fjmr.v3i9.10813
Arlita, I. G. A. D., Prianti, N. K. A., Indraswari, I. G. A. A. P., & Kusuma, P. S. A. J. (2026). Pengaruh herding dan loss aversion terhadap keputusan investasi dengan literasi keuangan sebagai variabel moderasi. RIGGS: Journal of Artificial Intelligence and Digital Business, 4(4), 13172–13184.
Budiman, J., & Patricia, P. (2021). Pengaruh overconfidence bias, herding bias, representativeness bias, loss aversion dan risk perception terhadap investment decision di Kota Batam. CoMBInES-Conference on Management, Business, Innovation, Education and Social Sciences, 1(1), 1979–1987.
Budiman, J., Yodiputra, J., Candy, C., & Agustin, I. N. (2025). How overconfidence and mental accounting influence investments? The moderating role of financial literacy. Asian Management and Business Review, 5(1), 1–18.
Dewi, P. P., & Yudiantara, I. P. A. (2026). Pengaruh overconfidence, illusion of control, dan loss aversion terhadap keputusan investasi investor Gen Z. Juara: Jurnal Riset Akuntansi, 16(1), 50–70.
Fahmi, Z., & Raprayogha, R. R. (2021). Pengaruh overconfidence, experience dan risk perception terhadap pengambilan keputusan investasi individu di Kota Makassar. Study of Scientific and Behavioral Management, 2(4).
Febianti, V., & Simatupang, F. S. (2025). Gen Z dan keputusan investasi: Pengaruh overconfidence, regret aversion, dan loss aversion di Kota Cimahi. Jurnal Administrasi Bisnis, 15(1), 1–10.
Ghozali, I. (2021). Partial Least Squares: Konsep, teknik, dan aplikasi menggunakan program SmartPLS.
Gufron, A. M., & Wibowo, P. A. (2024). Faktor-faktor psikologis yang mempengaruhi keputusan investasi Generasi Z. Jurnal Manajemen dan Profesional, 5(3), 342–361.
Hair, J. F. (2014). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Sage.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24.
Hartati, R., & Syarifudin, A. (2025). Peran moderasi literasi keuangan pada hubungan overconfidence, kecemasan, dan risk tolerance terhadap keputusan investasi Generasi Z. Economics and Digital Business Review, 7(1), 307–318.
Hayati, R. N., & Desmiza. (2025). Pengaruh motivasi investasi, risk perception, dan loss aversion terhadap keputusan investasi Generasi Z Bandung yang dimoderasi oleh financial literacy. Alignment: Journal of Administration and Educational Management, 8(3), 655–664.
Hossain, T., & Siddiqua, P. (2024). Exploring the influence of behavioral aspects on stock investment decision-making. PSU Research Review, 8(2), 467–483.
Humairo, A., & Panuntun, B. (2022). Perilaku overconfidence, loss aversion, dan herding bias dalam pengambilan keputusan investasi pasar modal pada Generasi Z. Jurnal Mahasiswa Bisnis & Manajemen, 1(6).
Irvansyah, D., Murhadi, W. R., & Mahadwartha, P. A. (2024). The effect of overconfidence, representative, anchoring, and availability biases on investment decisions and market efficiency. Matrik: Jurnal Manajemen, Strategi Bisnis, dan Kewirausahaan, 18(2), 125–136.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk.
Khsunah, F. L., Fachrur, M. M., & Taruna, M. S. (2024). The effect of financial literacy, risk tolerance, loss aversion and herding bias on individual investors in stock investment decision making. Jurnal Magistra Ekonomi Bisnis, 2(1), 22–32.
Kumalasari, P., & Prajawati, M. I. (2025). Financial literacy as moderation between overconfidence, loss aversion, fear of missing out, and investment decision. Jurnal Fokus Manajemen Bisnis, 15(2), 269–287.
Limarus, V. H., & Pamungkas, A. (2023). Pengaruh herding behavior, loss aversion, dan financial literacy terhadap investment decision. Jurnal Muara Ilmu Ekonomi dan Bisnis, 7(2), 389–401.
Listiani, E., & Soleha, E. (2023). Literasi keuangan, risk tolerance dan overconfidence terhadap keputusan investasi pada pekerja di kawasan industri Cikarang. Journal of Management and Business, 5(2), 983–993.
Mahmood, F., Arshad, R., Khan, S., Afzal, A., & Bashir, M. (2024). Impact of behavioral biases on investment decisions and the moderation effect of financial literacy. Acta Psychologica, 247, 104303.
Mujianah, S., Anita, S. Y., & Ermawati, L. (2025). Pengaruh literasi keuangan, overconfidence, loss aversion dan herding bias terhadap keputusan investasi di Indeks Saham Syariah Indonesia dalam perspektif bisnis Islam. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi, 9(2), 625–654.
OJK. (2025). Pengelolaan Investasi. Otoritas Jasa Keuangan.
Rinjani, A. C., & Darussalam, M. R. (2024). Investasi di era digital: Peluang dan tantangan di pasar modal. Jurnal Media Akademik, 2(12).
Shefrin, H. (2018). Behavioral Corporate Finance: Concepts and Cases for Teaching Behavioral Finance (2nd ed.). McGraw-Hill Education.
Sidayang, S., Turu' Allo, M. H., Tiwa, A. S., Pangemanan, N., Harefa, J. P., & Abner. (2024). Pengaruh perkembangan teknologi di era digital terhadap investasi dan pasar modal. Social Science, 12(2), 162–166.
Sri Wahyu Diastuti. (2024). Pegawai swasta dominasi pemilik SID di pasar modal Sulsel sebesar 38.271 rekening. SULSELSATU.com.
Sugiyono. (2017). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta.
Tandelilin, E. (2010). Portofolio dan Investasi: Teori dan Aplikasi. Kanisius.
Tubastuvi, N., Azzahara, C. T. M., Purwidianti, W., & Bagis, F. (2024). Analisis pengaruh risk perception, risk tolerance, overconfidence, dan loss aversion terhadap keputusan investasi Generasi Milenial. Ecobisma (Jurnal Ekonomi, Bisnis dan Manajemen), 11(1), 62–76.
Tyas, A. S., & Fathmaningrum, E. S. (2024). The influence of financial literacy and loss aversion on investment decision making with financial behavior as a moderation variable. Proceedings Pekan Ilmiah Mahasiswa Akuntansi, 4, 1–17.
Usriyono, E., & Wahyudi, S. (2023). The investment decision of millennial generation: An analysis using financial literacy and financial behavior. Corporate Governance and Organizational Behavior Review, 7(2), 8–14.
Published
2026-07-21
How to Cite
Ahmad, L., Abd Wahab, & Eka Indriyani. (2026). The Influence of Loss Aversion and Overconfidence on Generation Z Investment Decisions Moderated by Financial Literacy. International Journal of Economics, Business and Innovation Research, 5(04), 4876-4891. https://doi.org/10.63922/ijebir.v5i04.5244
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