Abstract
The objective of this research is to examine the differences in investment decisions made by non-professional investors when the information provided is presented in some differ-ent ways. Belief-adjustment model (information order and disclosure pattern) and fram-ing effect are pretended in some factors, which influence investors to make different deci-sions. Design of experiment for this research is 2×2×2. Participants involved in this research are 111 undergraduate students of STIE Perbanas Surabaya majoring in Ac-counting and Management. The statistical method used in this study is independent sample t-test or mann-whitney u-test. The results show that either step-by-step or end-of-sequence presentation patterns can cause recency effect, and it is greater for sequential condition than simultaneous condition. But, the result is inconsistent for end-of-sequence pattern which in some conditions can caused no order effect. In another side, the result also proves that framing effect can influence investor’s consideration in deci-sion making.
Highlights
In 2016, there were 537 public companies listed on the Indonesia Stock Exchange (IDX)
The Discussion of Information Order Testing Information order testing is divided into four hypotheses which aim to see whether there are differences in investment decisions between the participants receiving good news followed by bad news information (++--) and the participants receiving bad news followed by good news information (--++)
While the investment decisions of participants who receive good news followed by bad news information (++--) with the presentation pattern of Step by Step and framing in line with information differ significantly from participants who receive bad news followed by good news information (--++) with End-of-Sequence presentation patterns and framing in line with information
Summary
In 2016, there were 537 public companies listed on the Indonesia Stock Exchange (IDX). Some companies present their financial statements separately from the annual reports. Financial statements and annual reports are useful to investors as one of the basic considerations in making investment decisions. The problem that needs to be investigated is the fact that the information obtained, either from the internal companies (financial report or annual report) or from external companies (mass media, stock analysts, etc.), presents the same information but in a different way. This occurs due to the shift in the tendency of investors in determining investment decisions.
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