Trading activity and Overconfidence: First Evidence from a large European Database

Shaneera Boolell-Gunesh () and Maxime Merli
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Shaneera Boolell-Gunesh: LaRGE Research Center, Université de Strasbourg

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: We investigate the presence of overconfidence for 43 958 individual investors using a large brokerage account database between 1999 and 2006. We employ three methodologies to gauge overconfidence and our main results show that independently of the methodology considered, individual investors are subject to overconfidence and consequently trade too frequently. Securities investors are buying are systematically underperforming those they are selling on follow-up periods; investors are clearly not making profitable trades.

JEL-codes: G10 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2010-06

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