Overconfidence in Investment Decisions: An Experimental Approach

Dennis Dittrich, Werner Güth () and Boris Maciejovsky

No 626, CESifo Working Paper Series from CESifo

Abstract: We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence increases (i) with the absolute deviation from optimal choices, (ii) with task complexity, and (iii) decreases with uncertainty as indicated by the difference between willingness to pay and to accept.

Keywords: risky decision making; behavioral finance; portfolio choice; experimental economics (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Overconfidence in investment decisions: An experimental approach (2005)
Working Paper: Overconfidence in Investment Decisions: An Experimental Approach
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_626

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