Learning To Be Overconfident

Talk and Action: What Individual Investors Say and What They Do

“…Analyzing a sample of US discount brokerage clients who switch from phone-based to online trading, Barber and Odean (2002) "posit that online investors become more overconfident once online for three reasons: the self-attribution bias, an illusion of knowledge, and an illusion of control." (see also Daniel et al (1998) and Gervais and Odean (2001)). Overconfidence is an appealing theoretical concept.…”

“…Survey responses allow us to construct proxies of attributes that have been previously identified as drivers of overconfidence such as an investor's perceived control over his investments or his tendency to attribute gains to his skill and losses to bad luck (see Daniel et al (1998) and Gervais and Odean (2001)). These measures fail to explain much difference in portfolio diversification and turnover.…”

The Optimism Cycle: Sell in May

“…The self attribution-bias or self-serving bias is the inclination of people to attribute positive results to internal factors like skill but negative ones to external factors. These biases are widely known and documented in articles like Daniel et al [1998] and Gervais and Odean [2001] or behavioral finance books like Shefrin [2002].…”

Determining Advanced and Basic Financial Literacy Relations and Overconfidence, and Informative Social Media Association of University Students in Turkey

“…Many theoretical models have taken overconfidence into account (e.g., Benos, 1998;Daniel, Hirshleifer, & Subrahmanyam, 2001;De Long, Shleifer, Summers, & Waldmannet, 1991;Gervais & Odean, 2001;Kyle & Wang, 1997;Odean, 1998). Furthermore, overconfident investors tend to trade excessively and realize lower returns (Odean, 1998).…”