Overconfidence bias among investors: A qualitative evidence from Ponzi scheme case study

Muhammad Takiyuddin Abdul Ghani, Bahyah Abdul Halim, Syamsul Azri Abdul Rahman, Nor Akmar Abdullah, Asyraf Afthanorhan, Nurwahida Yaakub

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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.
Original languageEnglish
Pages (from-to)59-75
Number of pages17
JournalCorporate and Business Strategy Review
Issue number2
Publication statusPublished - 28 Mar 2023


  • Overconfidence Investment Scheme
  • Ponzi
  • Psychological Biases
  • Qualitative
  • Thematic Analysis Bias

ASJC Scopus subject areas

  • Strategy and Management
  • Earth and Planetary Sciences (miscellaneous)
  • Management Science and Operations Research
  • Decision Sciences (miscellaneous)


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