Overconfidence and Excessive Trading Behavior: An Experimental Study

Trinugroho, Irwan and Sembel, Roy (2011) Overconfidence and Excessive Trading Behavior: An Experimental Study. International Journal of Business and Management, 6 (7).

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    Abstract

    The main objective of the research is to examine the excessive trading hypothesis, investors who have higher overconfidence shown by high miscalibration levels will tend to practice aggresive and excessive trading strategy. It is an experimental research which combines both between and within subject design. The participants are undergraduate students who have already taken financial management course but have not yet invest in real capital market. The result of the research shows that high overconfidence investors have higher trading activity than low overconfidence investor. The other result shows that among high overconfidence investors, there is no trading activity differences between pre and post bad news, whereas among low overconfidence investors, the existence of bad news cause trading activity to decrease in the post bad news period. Then, the investment returns of high overconfidence investors is significantly lower than that of the low overconfidence investors.

    Item Type: Article
    Subjects: H Social Sciences > H Social Sciences (General)
    H Social Sciences > HB Economic Theory
    H Social Sciences > HC Economic History and Conditions
    Divisions: Lembaga Penelitian dan Pengabdian Kepada Masyarakat - LPPM
    Depositing User: Anis Fagustina
    Date Deposited: 02 May 2014 15:53
    Last Modified: 02 May 2014 15:53
    URI: https://eprints.uns.ac.id/id/eprint/13932

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