Abstract
This study aims to examine the prevalence of overconfidence bias in the decision-making process of Malaysian investors in Ponzi schemes. We explore a well-documented behavior that distorts the investor’s judgment, leading to a future event’s miscalculation — a psychological bias known as overconfidence bias (Kuranchie-Pong & Forson, 2022). Our study offers a novel viewpoint by investigating the hard-to-reach type of investor, the Ponzi scheme investors using the behavioral finance theory and qualitative method. Therefore, this investigation employed qualitative reasoning, which could also be an example of applying thematic analysis using ATLAS.ti. This study’s findings indicate that Ponzi scheme investors exhibit overconfidence bias in investing in the Ponzi investment schemes. We unraveled three types of overconfidence bias that prevail in the Ponzi scheme investors’ decision process. Acknowledging its limitations as a qualitative inquiry, the authors call for a joint effort to explore this field of study further. This emerging area of investor behavior research will afford valuable knowledge that could resolve the mysteries behind the never-ending issue of the Ponzi investment scheme.
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