Overconfidence, experience, and professionalism: An experimental study

Lukas Menkhoff, Maik Schmeling and Ulrich Schmidt

Journal of Economic Behavior & Organization, 2013, vol. 86, issue C, 92-101

Abstract: This paper presents an online-experiment on overconfidence in the context of financial markets. Our subject pool consists of institutional investors, investment advisors and individual investors, all of them being registered users of a large online platform for market sentiment data. Due to their registration, several socioeconomic characteristics of participants can be controlled for in our analysis. It turns out that there are stable differences in overconfidence between the three investor groups. Moreover, investment experience and age have a significant impact on the degree of overconfidence which goes surprisingly in opposite direction. We argue that these results have important implications for studies analyzing the impact of experience on behavior in (financial) markets.

Keywords: Market behavior; Overconfidence; Experience; Professionalism (search for similar items in EconPapers)
JEL-codes: D81 F30 G1 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (38)

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Working Paper: Overconfidence, experience, and professionalism: An experimental study (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:86:y:2013:i:c:p:92-101

DOI: 10.1016/j.jebo.2012.12.022

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