The dynamics of overconfidence: Evidence from stock market forecasters

Richard Deaves, Erik Lüders and Michael Schröder

No 05/10, CoFE Discussion Papers from University of Konstanz, Center of Finance and Econometrics (CoFE)

Abstract: As a group, market forecasters are egregiously overconfident. In conformity to the dynamic model of overconfidence of Gervais and Odean (2001), successful forecasters have become more overconfident. What's more, more experienced forecasters have learned to be overconfident, and hence are more susceptible to this behavioral flaw than their less experienced peers . It is not just individuals who are affected. Markets also become more overconfident when market returns have been high.

Date: 2005
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Related works:
Journal Article: The dynamics of overconfidence: Evidence from stock market forecasters (2010)
Working Paper: The Dynamics of Overconfidence: Evidence from Stock Market Forecasters (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cofedp:0510

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