Examining belief adjustment model on investment decision making
by Luciana Spica Almilia; Supriyadi
International Journal of Economics and Accounting (IJEA), Vol. 4, No. 2, 2013

Abstract: This research aims to examine the influence of order effects and response mode [a step by step (SbS) and an end of sequence (EoS)] or belief adjustment model on investment decisions making. The contribution of this research to the accounting literature is the existence of Belief Adjustment model developed by Hogarth and Einhorn that will be tested in this study in setting the investment decision. Experiment method is used to examine the research hypotheses. Final participant(s) in this research were (are) 93 people who are accounting students majoring in accounting at the private university in Surabaya, Indonesia. The results of this study show that a step by step (SbS) response mode tends to find significant recency effect, while judgment that require only one judgment at the end of the evidence series. Meanwhile, an end of sequence (EoS) response mode tends to find no recency effect. Practical implications of the research is to understand the impact of the presentation of accounting information, the order of information presentation, and the presentation of information investment decision pattern. For the Capital Market Supervisory Agency (BAPEPAM), this research may contribute to setting policies related to information order and disclosure pattern.

Online publication date: Tue, 29-Apr-2014

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