THE ROLE OF FRAMING EFFECT IN INVESTMENT DECISION-MAKING: A SYSTEMATIC LITERATURE REVIEW

Abstract

This study aims to analyze the influence of the framing effect on investment decision-making using a Systematic Literature Review (SLR) approach. A total of 15 selected articles consisting of Scopus-indexed journals, SINTA-accredited journals, and supporting literature were analyzed to provide a comprehensive understanding of how information presentation affects investor behavior. The findings indicate that the framing effect consistently influences investment decisions, where positive framing tends to lead to risk-averse behavior, while negative framing encourages risk-seeking behavior. Furthermore, the results reveal that several moderating variables, such as emotions, locus of control, time pressure, and loss aversion, play a significant role in strengthening or weakening the impact of framing on decision-making outcomes. This study not only synthesizes empirical evidence from diverse contexts but also highlights inconsistencies in prior findings and identifies key research gaps, particularly in the integration of multiple behavioral factors and emerging market perspectives. Therefore, this study contributes to the development of behavioral accounting and finance literature by offering a more holistic understanding of investor decision-making processes and providing directions for future research.