The dynamics of overconfidence: Evidence from stock market forecasters

Richard Deaves (), Erik Lüders () and Michael Schröder
Additional contact information
Richard Deaves: McMaster University
Erik Lüders: Pinehill Capital and Laval University
Michael Schröder: Center for European Economic Research (ZEW)

No 05-10, CoFE Discussion Paper from Center of Finance and Econometrics, University of Konstanz

Abstract: As a group, market forecasters are egregiously overconfident. In conformity to the dynamic model of overconfidence of Gervais and Odean (2001), successful forecasters 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.

New Economics Papers: this item is included in nep-cbe, nep-cfn, nep-fmk and nep-for
Date: 2005-10-07
View list of references View citations in EconPapers

Downloads: (external link)
http://cofe.uni-konstanz.de/Papers/dp05_10.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:knz:cofedp:0510

Ordering information: This working paper can be ordered from
http://cofe.uni-konstanz.de

Access Statistics for this paper

More papers in CoFE Discussion Paper from Center of Finance and Econometrics, University of Konstanz
Contact information at EDIRC.
Series data maintained by Ingmar Nolte ().