Financial Behavior And Stock Investment Decisions: Exploring The Role Of Dual Process Theory Among Generation Z In East Java

Siti Aisjah; Atim Djazuli

Authors

Siti Aisjah Management, Faculty of Economics and Business, University of Brawijaya
Atim Djazuli Management, Faculty of Economics and Business, University of Brawijaya

Keywords:

Financial Behavior, Loss Aversion, Investment Decision, Herding Behavior

Abstract

study examines the influence of financial behavior, including fear of missing out, financial literacy, herding behavior, loss aversion, and risk perception, on stock investment decisions among Generation Z in East Java. Utilizing Dual Process Theory as a theoretical framework, this research explores the dynamic interaction between intuitive and analytical thinking processes in shaping investment behavior. A quantitative approach was employed, with data collected through questionnaires distributed to 402 Generation Z respondents actively investing in the stock market. The results reveal that financial literacy positively impacts herding behavior and loss aversion, while herding behavior and loss aversion significantly influence investment decisions. Moreover, fear of missing out and risk perception serve as critical intermediaries, illustrating how emotional and cognitive factors interact in decision-making. The findings contribute to a deeper understanding of Generation Z’s investment behavior, highlighting the significance of balancing intuition and analysis. Practical implications include the need for targeted financial education programs to enhance financial literacy and reduce bias-driven behaviors. This study provides theoretical insights by bridging Dual Process Theory with financial decision-making, offering a comprehensive framework for understanding stock investment behavior in emerging markets. Future research could expand the scope by exploring other demographic groups or incorporating additional psychological factors.

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