Quotation Fellner-Röhling, Gerlinde, Krügel, Sebastian. 2014. Judgmental overconfidence and trading activity. Journal of Economic Behavior and Organization. 107 (B), 827-842.


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Abstract

We investigate the theoretically proposed link between judgmental overconfidence and trading activity. In addition to applying classical measures of miscalibration, we introduce a measure to capture misperception of signal reliability, which is the relevant bias in the theoretical overconfidence literature. We relate the obtained overconfidence measures to trading activity in call and continuous experimental asset markets. Our results confirm prior findings that classical miscalibration measures are not related to trading activity. Misperception of signal reliability is positively related to trading volume in the continuous market for one of two treatments. In the other one, no relation is found except that highly overconfident subjects trade less. In addition, we find that men trade more than women at high levels of risk aversion, but the gender trading gap vanishes as risk aversion lessens. The reason is that the trading activity of women seems to be more sensitive to risk attitudes than that of men.

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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Journal of Economic Behavior and Organization
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-B, WH-A
Language English
Title Judgmental overconfidence and trading activity
Volume 107
Number B
Year 2014
Page from 827
Page to 842
Reviewed? Y
DOI https://doi.org/10.1016/j.jebo.2014.04.016
Open Access N

Associations

People
Fellner-Röhling, Gerlinde (Details)
External
Krügel, Sebastian (TUM School of Governance, Germany)
Research areas (ÖSTAT Classification 'Statistik Austria')
5335 Political economic theory (Details)
5361 Financial management (Details)
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