The Influence of Familiarity Bias and Heuristics on Investors’ Decisions in Selecting Stocks

Based on behavioral finance theory, investors are influenced by psychological factors that lead them to irrationality such as biases and heuristics. This study examines the effect of Familiarity bias and Heuristics on investors’ decisions and analyzes whether Brand familiarity moderates the effect of Familiarity bias. Data were collected through questionnaires from 201 investors and analyzed using multiple linear regression and moderated regression with SPSS version 30. The results indicate Familiarity bias and Heuristics positively and significantly influence investors’ decisions in selecting stocks and Brand familiarity doesn’t moderate the influence of Familiarity bias. This research enriches literature, supports investors identifying psychological factors affecting their decisions, and provides insight for financial institutions to assist Indonesian investors in minimizing errors in decision making.