The Role of Emotional States on Purchase Decision-Making among Novice Stock Investors

https://doi.org/10.22146/gamajop.75580

Joshua Antonius Dardana(1), Honey Wahyuni Sugiharto Elgeka(2*)

(1) Faculty of Psychology, Universitas Surabaya
(2) Faculty of Psychology, Universitas Surabaya
(*) Corresponding Author

Abstract


Novice stock investors tend to make investment decisions based on their emotions, so they usually have lower performance. Emotions can affect decision-making through immediate emotions (emotional states) and expected emotions (emotional consequences). Happy and sad are the strongest emotions. Therefore, this research aims to examine and explain the effect of emotional states, specifically happy and sad, on novice stock investors' purchase decision-making. This research uses the experiment method, with 30 novice stock investors divided into three groups (two experimental and one control group). The result shows no effect between happy and sad emotional states on purchase decision-making (p > 0,05). The result is caused by participants' tendencies to make rational decisions for the highest utility. The higher the utility they get, the happier they will be, and vice versa. Thus, happy and sad emotions act as expected emotions, not as immediate emotions in decision-making.

Keywords


Happy; Sad; Decision Making; Investors

Full Text:

PDF


References

Alquraan, T., Alqisie, A., & Al Shorafa, A. (2016). Do behavioral finance factors influence stock investment decisions of individual investors? (evidences from saudi stock market). American International Journal of Contemporary Research, 6(3), 159–169. Retrieved from www.aijcrnet.com

Baker, H. K., & Ricciardi, V. (2014). Investor behavior: The psychology of financial planning and investing. In Wiley. https://doi.org/10.1002/9781118813454.ch4 Bieg, M. (2013). Trait and state academic emotions : Two sides of the same coin ? 1–114.

Breaban, A., & Noussair, C. N. (2018). Emotional state and market behavior. Review of Finance, 22(1), 279–309. https://doi.org/10.1093/rof/rfx022

Duque, M. J., Turla, C., & Evangelista, L. (2013). Effects of emotional state on decision making time. Procedia - Social and Behavioral Sciences, 97, 137–146. https://doi.org/10.1016/j.sbspro.2013.10.214

Fenton-O’Creevy, M., Soane, E., Nicholson, N., & Willman, P. (2011). Thinking, feeling and deciding: the influence of emotions on the decision making and performance of traders. Journal of Organizational Behavior, (32), 1044–1061. https://doi.org/10.1002/job720

Grizane, L., & Deksnis, H. (2011). Impact of altered emotional state on impulse purchasing behaviour: are happier people more likely to make impulse purchases? (Vol. 4). Retrieved from http://www.sseriga.edu/files/content/grizane_deksnis_paper.pdf

Holm, C., & Rikhardsson, P. (2008). Experienced and novice investors: Does environmental information influence investment allocation decisions? European Accounting Review, 17(3), 537–557. https://doi.org/10.1080/09638180802016627

Kahneman, D. (2011). Thinking fast and slow. New York: Farrar, Straus and Giroux.

Loewenstein, G., & Lerner, J. S. (2003). The role of affect in decision making. Handbook of Affective Science, pp. 619–642.

Marcusson-Clavertz, D., Kjell, O. N. E., Persson, S. D., & Cardeña, E. (2019). Online validation of combined mood induction procedures. PLoS ONE, 14(6), 1–16. https://doi.org/10.1371/journal.pone.0217848

Nurmasari, I. (2020). Dampak covid-19 terhadap perubahan harga saham dan volume transaksi (studi kasus pada PT. ramayana lestari sentosa, Tbk.). Jurnal SEKURITAS (Saham, Ekonomi, Keuangan Dan Investasi), 3(3), 230. https://doi.org/10.32493/skt.v3i3.5022

Pettinelli, M. (2014). The psychology of emotions, feelings and thoughts. Rolls, E. T. (2014). Emotion and decision-making explained.

Shevchenko, Y., & Bröder, A. (2019). Noncompliance with online mood manipulations using film clips: how to detect and control for it. Heliyon, Vol. 5. https://doi.org/10.1016/j.heliyon.2019.e01438

Siedlecka, E., & Denson, T. F. (2019). Experimental methods for inducing basic emotions: a qualitative review. Emotion Review, 11(1), 87–97. https://doi.org/10.1177/1754073917749016

Statistik Pasar Modal. (2021). Retrieved June 14, 2021, from PT Kustodian Sentral Efek Indonesia website: https://www.ojk.go.id/id/kanal/pasar-modal/data-dan-statistik/statistik-pasar-modal/Default.aspx

Takemura, K. (2014). Behavioral decision theory. In Springer. https://doi.org/10.1146/annurev.ps.12.020161.002353

Tobing, S. J. L., Situmorang, H., Malau, M., Samosir, P. Y., Kennedy, P. S. J., & Lekhenila, A. J. (2021). Simulasi saham dalam “Yuk Nabung Saham” kepada masyarakat melalui webinar online. Ikra-Ith …, 4(2), 143–147. Retrieved from https://journals.upi-yai.ac.id/index.php/IKRAITH-ABDIMAS/article/download/994/784

Venezia, I., Nashikkar, A., & Shapira, Z. (2011). Firm specific and macro herding by professional and amateur investors and their effects on market volatility. Journal of Banking and Finance, 35(7), 1599–1609. https://doi.org/10.1016/j.jbankfin.2010.11.015

Watson, D., & Clark, L. A. (1994). The panas-x. FEBS Journal, 277(18), 3622–3636. Zhang, W., Gross, J., & Hayne, H. (2017). If you’re happy and you know it: Positive moods reduce age-related differences in false memory. Child Development, 00(0), 1–10. https://doi.org/10.1111/cdev.12890



DOI: https://doi.org/10.22146/gamajop.75580

Article Metrics

Abstract views : 3319 | views : 2174

Refbacks

  • There are currently no refbacks.


Copyright (c) 2023 Gadjah Mada Journal of Psychology (GamaJoP)

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Recent Issues:

Buku 1 Buku 1 Buku 1 Buku 1 
Vol 11 Issue 1 (2025)
Page 1-69		 Vol 10 Issue 2 (2024)
Page 79-161		 Vol 10 Issue 1 (2024)
Page 1-78		 Vol 9 Issue 2 (2023)
Page 163-292		 

Address:

Building D 6th Floor (606), Faculty of Psychology, Universitas Gadjah Mada, Yogyakarta, Indonesia, Jl. Sosio Humaniora No. 1, Bulaksumur Yogyakarta, 55781

Contact:

Whatsapp: +6281125210175
Email: gamajop.psikologi@ugm.ac.id

Creative Commons License