Overconfidence Behavior and Dynamic Market Volatility: Evidence from International Data

Jlassi, Mouna; Naoui, Kamel; Mansour, Walid

doi:10.1016/s2212-5671(14)00435-3

Cited by 34 publications

(34 citation statements)

References 28 publications

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“…Overconfidence and over optimism, conservatism, framing and anchoring, mental accounting, representativeness, loss aversion are among the most widespread biases impacting investor behavior in financial market and provoking bubbles and inevitably financial fluctuations. Overconfidence is regarded as the main trigger of the global financial crisis in the US market and in other continents (Jlassi et al, 2014), in financial market it leads to increased trading activity, higher risk taking, and less diversification (Merkle (2013), Mentel et al (2017), Belás et al (2016). Identification of behavioral biases' impact on financial market volatility is relevant for both investors and regulators and reinforces the importance of considering investor sentiment to better understand the behavior of financial markets (Horta and Lobão, 2018).…”

mentioning

confidence: 98%

Financial, business and trust cycles: the issues of synchronization

Bilan¹,

Brychko²,

Buriak³

et al. 2019

Zb. rad. Ekon. fak. Rij.

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Starting from 1920, the growing body of research has been focused on the role of psychological factors in cycle theories. Mainstream macroeconomic models are insufficient for exploring interaction among economic agents, financial institutions, and the real sector of economy. This paper is among the first to show the synchronization of financial and business cycles through the trust cycle but with a certain delay in terms. The paper presents the conceptualization of trust as a combination of two pillars-structure-based confidence based on objective information about system competences, regulations, and norms, and sentimentdriven actions of economic agents (feelings, emotions, and other subjective characteristics). The paper offers a theoretical descriptive model of a trust cycle that allows exploring several stages of correlation between financial fluctuations, trust changes, and large swings in business cycle.

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mentioning

confidence: 98%

Financial, business and trust cycles: the issues of synchronization

Bilan¹,

Brychko²,

Buriak³

et al. 2019

Zb. rad. Ekon. fak. Rij.

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“…The plots show that two pairs of similar years can be identified, 2006 and 2008 and 2010 and 2012. This could be due to the global financial crisis during 2009 (Authers, ; Jlassi, Naoui, & Mansour, ).…”

Section: Discussionmentioning

confidence: 99%

Spatio‐temporal analysis of economic, social, and environmental issues in the framework of sustainable development in worldwide countries

Rodríguez‐Rosa

Gallego‐Álvarez

Galindo-Villardón

2018

Sustainable Development

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“…The studies of Jlassi, Naoui and Mansour [2014], which were based on 27 stock exchanges in various cultural regions of the world, confirm that Asian markets (including Hong Kong, India and the Unauthenticated Download Date | 5/13/18 8:13 AM Philippines) experience the highest level of price changes and that Asian investors are subject to overconfidence.…”

Section: Study 1: Anchoring and Overconfidence In A Cultural Dimensionmentioning

confidence: 93%

Anchoring and Overconfidence: The Influence of Culture and Cognitive Abilities

Czerwonka

2017

International Journal of Management and Economics

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Anchoring and overconfidence are some of the best-known biases in psychology and behavioral finance literature. While a number of studies have investigated the evidence of these biases and explored the motives and human factors that contribute to the one's susceptibility to the effects, little is known about the cultural factors behind these heuristic biases. This paper aims to fill the research gap and shows the differences in proneness to the anchoring effect and overconfidence in two samples of students from Poland and India. The purpose of the study is twofold: to analyze susceptibility to behavioral effects relative to cultural background; and to consider the subjects' cognitive abilities as a potential factor in their exposure to behavioral biases and confirm that subjects with higher cognitive skills, measured by the cognitive reflection test (CRT) display less susceptibility to the above heuristic biases.

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Overconfidence Behavior and Dynamic Market Volatility: Evidence from International Data

Cited by 34 publications

References 28 publications

Financial, business and trust cycles: the issues of synchronization

Financial, business and trust cycles: the issues of synchronization

Spatio‐temporal analysis of economic, social, and environmental issues in the framework of sustainable development in worldwide countries

Anchoring and Overconfidence: The Influence of Culture and Cognitive Abilities

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