The relationship between self-control and return investment: Evidence from Indonesia

Priyo Suwono; Axel Giovanni; Dian Marlina Verawati

doi:10.14710/dijb.6.2.2023.104-113

DOI: https://doi.org/10.14710/dijb.6.2.2023.104-113

The relationship between self-control and return investment: Evidence from Indonesia

Priyo Suwono, Axel Giovanni

, Dian Marlina Verawati

Department of Management, Universitas Tidar, Indonesia

Citation Format:

Abstract

Self-control in behavioral economics is a matter of intertemporal choice, namely, consumption time. Human behavior in making economic decisions is determined by wealth and the mental accounting one owns. The number of capital market investors in Indonesia has increased in recent years. In addition to conducting fundamental analysis, investors also need to be able to control themselves to reduce the risk of exposure to bias. This study aims to provide evidence of the role of self-control quality on investment returns. The population of this study was capital market investors on the Indonesia Stock Exchange (IDX), with a sample of 51 investors obtained using a purposive sampling method. The research data is primary data obtained from the questionnaire method and analyzed using cluster analysis and an independent samples t-test. The software tool used for data analysis is SPSS 26. The results of this study provide empirical evidence that the quality of self-control plays a role in the investment returns of capital market investors on the Indonesia Stock Exchange (IDX).

Fulltext View|Download

Keywords: Self-control; Return Investment; Mental Accounting

Article Metrics:

Article Info

Section: Articles

Language : EN

In Vol 6, No 2 (2023)

Recent articles

The impact of green marketing on customer purchase intention: The mediating role of customer concerns and beliefs and green brand knowledge The relationship between self-control and return investment: Evidence from Indonesia Analysis of SMEs performance based on innovation practice, market orientation, and innovation barriers More recent articles

Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35(1), 124–140. https://doi.org/10.1016/0749-5978(85)90049-4
Atmaningrum, S., Kanto, D. S., & Kisman, Z. (2021). Investment Decisions: The Results of Knowledge, Income, and Self-Control. Journal of Economics and Business, 4(1), 100–112. https://doi.org/10.31014/aior.1992.04.01.324
Barberis, N. (2018). Richard Thaler and the Rise of Behavioral Economics. Expert Review of Obstetrics and Gynecology, 120(3), 1661–1684. https://doi.org/https://dx.doi.org/10.1111/sjoe.12313
Chevalier, J., & Ellison, G. (1997). Risk taking by mutual funds as a response to incentives. Journal of Political Economy, 105(6), 1167–1200. https://doi.org/10.1086/516389
DellaVigna, S., & Malmendier, U. (2006). Paying not to go to the gym. American Economic Review, 96(3), 694–719. https://doi.org/10.1257/aer.96.3.694
Ghozali, I. (2018). Aplikasi Analisis Multivariate (10th ed.). Badan Penerbit Universitas Diponegoro
Gourville, J. T., & Soman, D. (1998). Payment depreciation: The behavioral effects of temporally separating payments from consumption. Journal of Consumer Research, 25(2), 160–174. https://doi.org/10.1086/209533
Hartomo, G. (2020). Penyebab IHSG Terus Merosot, Karena Panic Selling? OKE Finance. https://economy.okezone.com/read/2020/03/23/278/2187623/penyebab-ihsg-terus-merosot-karena-panic-selling
Haryanto. (2020). Panic Selling, Bursa Saham Asia Hancur-Hancuran. CNBC Indonesia. https://www.cnbcindonesia.com/market/20200313092224-17-144565/panic-selling-bursa-saham-asia-hancur-hancuran
Hastings, J. S., & Shapiro, J. M. (2013). Fungibility and Consumer Choice: Evidence From Commodity Price Shocks. 128(August), 1057–1106. https://doi.org/10.1093/qje/qjs020.Advance
Heath, C., & Soll, J. (1996). Mental budgeting and consumer decisions. Journal of Consumer Research, 23(1), 40–52. https://doi.org/10.1086/209465
Kahneman, D., & Tversky, A. (1979). PROSPECT THEORY: AN ANALYSIS OF DECISION UNDER RISK. Econometrica, 47(2), 263–292. https://doi.org/https://doi.org/10.2307/1914185
Kennedy, S. (2022). What Does World Economy Look Like Through 2075? Here’s What Goldman Sachs Thinks. Bloomberg. https://www.bloomberg.com/news/articles/2022-12-06/what-does-world-economy-look-like-through-2075-here-s-what-goldman-sachs-thinks?leadSource=uverify wall
Konstantin E. Lucks. (2016). The Impact of Self-Control on Investment Decisions. Munich Personal RePEc Archive, 17(73099), 1–63
KSEI. (2022). Demografi Investor. PT Kustodian Sentral Efek Indonesia. https://www.ksei.co.id/publications/demografi_investor
Loewenstein, G., & Thaler, R. H. (1989). Anomalies: Intertemporal Choice. Journal of Economic Perspectives, 3(4), 181–193. https://doi.org/10.1257/jep.3.4.181
Lubatkin, M. H., Ling, Y., & Schulze, W. S. (2007). An organizational justice-based view of self-control and agency costs in family firms. Journal of Management Studies, 44(6), 955–971. https://doi.org/10.1111/j.1467-6486.2006.00673.x
Prayoga, F. (2020). Titik Terendah IHSG Sepanjang 2020 Pada 23 Maret, Jatuh 4,9%. OKE Finance. https://economy.okezone.com/read/2020/12/30/278/2336421/titik-terendah-ihsg-sepanjang-2020-pada-23-maret-jatuh-4-9
Samuelson, P. A. (1937). A note on measurement of utility. Review of Economic Studies, 4(2), 155–161. https://doi.org/10.2307/2967612
Sekścińska, K., Rudzinska-Wojciechowska, J., & Jaworska, D. (2021). Self-control and investment choices. Journal of Behavioral Decision Making, 34(5), 691–705. https://doi.org/10.1002/bdm.2236
Shafir, E., & Thaler, R. H. (2006). Invest now, drink later, spend never: On the mental accounting of delayed consumption. Journal of Economic Psychology, 27(5), 694–712. https://doi.org/10.1016/j.joep.2006.05.008
Shefrin, H. M., & Thaler, R. H. (1988). the Behavioral Life‐Cycle Hypothesis. Economic Inquiry, 26(4), 609–643. https://doi.org/10.1111/j.1465-7295.1988.tb01520.x
Shiller, R. J. (1987). Investor Behavior in the October 1987 Stock Market Crash: Survey Evidence. NBER Working Paper, 20(August), 146–146. https://doi.org/DOI 10.3386/w2446
Staw, B. M. (1976). Knee-deep in the big muddy: a study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16(1), 27–44. https://doi.org/10.1016/0030-5073(76)90005-2
Sukamulja, S. (2021). Manajemen Keuangan Korporat (S. Tjen (ed.); 1st ed.). Penerbit ANDI dan BPFE
Tangney, J. P., Baumeister, R. F., & Boone, A. L. (2004). Tangney, Baumeister and Boone(2004)_High self‐control predicts good adjustment, less pathology, better grades, and interpersonal success.pdf. Journal of Personality, 2(April 2004), 54
Thaler, R. H. (1985). Mental accounting and consumer choice. Marketing Science, 27(1), 15–25. https://doi.org/10.1287/mksc.1070.0330
Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206. https://doi.org/10.1002/(SICI)1099-0771(199909)12:3<183::AID-BDM318>3.0.CO;2-F
Thaler, R. H. (2016). Misbehaving (Z. Anshor (ed.)). PT Gramedia Pustaka Utama
Thaler, R. H., & Johnson, E. J. (1990). Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice. Management Science, 36(6), 643–660. https://doi.org/10.1287/mnsc.36.6.643
Thaler, R. H., & Shefrin, H. M. (1981). An Economic Theory of Self-Control. Journal of Political Economy, 89(2), 392–406. https://doi.org/10.1086/260971
Zhang, Y., & Sussman, A. B. (2018). The Role of Mental Accounting in Household Spending and Investing Decisions. Chicago Booth Research, 2011, 65–96. https://doi.org/http://dx.doi.org/10.1002/9781119440895.ch6

Last update:

No citation recorded.

Last update:

No citation recorded.

Author(s) Rights

In order for Diponegoro International Journal of Business (DIJB) to publish and disseminate research articles, we need publishing rights (transferred from author(s) to publisher). This is determined by a publishing agreement between the author(s) and DIJB. This agreement deals with the transfer or license of the copyright of publishing to DIJB, while authors still retain significant rights to use and share their own published articles. DIJB supports the need for authors to share, disseminate and maximize the impact of their research and these rights, in any databases.

As an author, you have rights to a large range of uses of your article, including use by your employing institute or company. These Author rights can be exercised without the need to obtain specific permission. Authors publishing in DIJB has wide rights to use their works for teaching and scholarly purposes without needing to seek permission, including:

use for classroom teaching by Author or Author's institution and presentation at a meeting or conference and distributing copies to attendees;
use for internal training by the author's company;
distribution to colleagues for their research use;
use in a subsequent compilation of the author's works;
inclusion in a thesis or dissertation;
reuse of portions or extracts from the article in other works (with full acknowledgement of final article);
preparation of derivative works (other than commercial purposes) (with full acknowledgement of final article);
voluntary posting on open web sites operated by author or author’s institution for scholarly purposes,

(but it should follow the open-access license of Creative Common CC-by-SA License).

Authors/readers/third parties can copy and redistribute the material in any medium or format, as well as remix, transform, and build upon the material for any purpose, even commercially, but they must give appropriate credit (the name of the creator and attribution parties (authors detail information), a copyright notice, an open-access license notice, a disclaimer notice, and a link to the material) and provide a link to the license.

Authors/readers/third parties can read, print and download, redistribute or republish the article (e.g. display in a repository), translate the article, download for text and data mining purposes, re-use portions or extracts from the article in other works, sell or re-use for commercial purposes, remix, transform, or build upon the material, they must distribute their contributions under the same license as the original Creative Commons Attribution-ShareAlike (CC BY-SA).

Copyright Transfer Agreement for Publishing (Publishing Right)

The authors submitting a manuscript do so on the understanding that if accepted for publication, the copyright for publishing (publishing right) of the article shall be assigned/transferred to the Department of Management, Faculty of Economics and Business, Universitas Diponegoro as the publisher of DIJB.

Upon acceptance of an article, authors will be asked to complete a 'Copyright Transfer Agreement for Publishing (CTAP)'. An e-mail will be sent to the Corresponding Author confirming receipt of the manuscript together with a CTAP form by the online version of this agreement.

DIJB, the publisher, and the editorial board make every effort to ensure that no wrong or misleading data, opinions or statements be published in the journal. In any way, the contents of the articles and advertisements published in DIJB are sole and exclusive responsibility of their respective authors and advertisers.

Remember, even though we ask for a transfer of copyright for publishing (CTAP), our journal Author(s) retain (or are granted back) significant scholarly rights as mentioned before.

The Copyright Transfer Agreement for Publishing (CTAP) Form can be downloaded here