An Experiment : Distribution of the Adversity Quotient as a Reduction of Bias in Estimating Earnings

PRADITHA Riza (STIE Tri Dharma Nusantara)
AGUSTUTY Lasty (STIE Tri Dharma Nusantara)
JAO Robert (Universitas Atmajaya Makassar)
RUSLAN Andi (IAIN Bone)
AISYAH Nur (STIE Tri Dharma Nusantara)
GUSTININGSIH Diah Ayu (STIE Tri Dharma Nusantara)

PRADITHA, R. , AGUSTUTY, L. , JAO, R. , RUSLAN, A. , AISYAH, N. , & GUSTININGSIH, D. A. (2023). An Experiment : Distribution of the Adversity Quotient as a Reduction of Bias in Estimating Earnings. , 21(6), 99-106, https://doi.org/10.15722/jds.21.06.202306.99

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Abstract

Purpose: This study aims to analyze the distribution of the role of adversity quotient in the estimation bias of future earnings. Adversity quotient is a cognitive ability that can be distributed as a reducer of bias effects that occur in profit forecasting or investment decision making. Research design, data and methodology: The study designs a full factorial within-subject 2×3 as a laboratory experiment. The study subjects are 30 accounting students who are proxied as investors. Results: The results show that the estimated earnings made by investors experience anchoring-adjustment heuristic bias which means the initial value becomes a basic belief that influences the decisions taken by investors. However, this study also provides evidence that heuristic bias can be reduced by the presence of adversity quotient. Investors who have high adversity ability are abler to reduce the estimation bias when compared to investors who have medium and low adversity ability so the higher the difficulty ability possessed by investors, the less likely the occurrence of bias in decision making. Conclusion: Thus, the adversity quotient is proven to be distributed as a reducing opportunity from the bias that will occur in estimating future earnings or making investment decisions.

keywords: Earnings estimates, Adversity quotient, Anchoring-adjustment, Heuristic bias, Distribution

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Article Contents

Vol.21 No.6

An Experiment : Distribution of the Adversity Quotient as a Reduction of Bias in Estimating Earnings

Abstract

Reference

The Journal of Distribution Science