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Boys will still be boys: Gender differences in trading activity are not due to differences in (over)confidence

Carlos Cueva, Inigo Iturbe-Ormaetxe (), Giovanni Ponti () and Josefa Tomás

Journal of Economic Behavior & Organization, 2019, vol. 160, issue C, 100-120

Abstract: The fact that men trade more than women in financial markets has been attributed to men's overconfidence. However, evidence supporting this view is only indirect. We directly test this conjecture experimentally, by measuring confidence using monetary incentives before participants trade in a simulated market. We find that men are more confident than women in our trading task. Men also trade more, and they hold larger and less diversified portfolios than women. However, we do not find that differences in confidence explain any portion of the gender gap in trading activity. We explore alternative candidate channels such as risk aversion, financial literacy or competitiveness but find that these factors are also unlikely to play a role.

Keywords: Overconfidence; Trade volume; Gender (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 G41 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:160:y:2019:i:c:p:100-120

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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