The Power of Overconfidence and Herding Bias, Investment Sentiment, Over/Underreaction in Influencing SDGs from Investment Decisions

Objective: The era of globalization makes investment activities in Indonesia easier with many digital platforms. The number of investors also increases every year because many people are starting to realize the importance of investing. In addition, it is also necessary to understand how to maintain SDGs from these investment decisions. This study aims to test the strength of overconfidence, herding bias, investment sentiment, and over/under reaction in influencing investment decisions in Indonesia. Method: This research is explanatory research with primary data. Primary data was obtained by distributing questionnaires to 350 investors in Indonesia from December 2023 to February 2024. Hypothesis testing in this research used Structural Equation Modelling (SEM) with SmartPLS3 software. Results and Discussion: The findings of this study reveal that overconfidence, investor sentiment, and over/underreaction all have a significant favorable impact on investing decisions. Meanwhile, herding bias no has effect on investment decisions. The prospect theory posits that humans choose among numerous alternatives based on the likelihood of upcoming or known dangers, supporting H1's findings. Meanwhile, H3 and H4 are based on behavioral finance theory, which describes how psychological aspects influence investing decisions. The MGA analysis of age, gender, and education level can substantially impact the relationship between overconfidence, herding, investing sentiment, and over/underreaction to investment decisions. MGA analysis of age, gender, and education level can substantially impact the relationship between overconfidence, herding, investing sentiment, and over/underreaction to investment decisions. Originality/Value: This study emphasizes novelty by expanding the discussion on investment decisions with multigroup analysis. Multigroup analysis is an added value because it sees the influence of overconfidence, investor sentiment, and over/underreaction on investment decisions more specifically related to demographic factors, namely age, gender, and education level.