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Price dynamics and trader overconfidence

Ahrens, Steffen; Bosch-Rosa, Ciril; Roulund, Rasmus - 2019

Overconfidence is one of the most important biases in financial markets and commonly associated with excessive trading … and asset market bubbles. So far, most of the finance literature takes overconfidence as a given, "static" personality … trait. In this paper we introduce a novel experimental design which allows us to track different measures of overconfidence …

Persistent link: https://www.econbiz.de/10012141867

Overconfidence in Investment Decisions:An Experimental Approach

Dittrich, Dennis; Güth, Werner; Maciejovsky, Boris - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2001

We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute … asset, the other with two risky assets. Overconfidence increases (i) with the absolutedeviation from optimal choices, (ii …

Persistent link: https://www.econbiz.de/10005867326

Confidence and career choices: An experiment

Barron, Kai; Gravert, Christina - 2019

Confidence is often seen as the key to success. Empirical evidence about how such beliefs about one's abilities causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one's own ability on two central...

Persistent link: https://www.econbiz.de/10012141875

Hindsight Bias and Individual RiskAttitude within the Context ofExperimental Asset Markets

El-Sehity, Tarek; Haumer, Hans; Helmenstein, Christian; … - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2002

This paper investigates (i) the robustness of hindsight bias in experimental assetmarkets, (ii) the time invariance of the different experimental risk elicitationmethods of certainty equivalents and binary lottery choices, and (iii) their correspondence.The results of our within-subjects...

Persistent link: https://www.econbiz.de/10005867042

Valuing Protection against Low Probability,High Loss Risks: Experimental Evidence

Morone, Andrea; Ozdemir, Ozlem - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2006

measure,(3)calculates relative risk aversion. The results of the experiment indicate that as theprobability of loss and loss …

Persistent link: https://www.econbiz.de/10005866644

Decision-making traits and states as determinants of risky choices

Gärtner, Manja; Tinghög, Gustav; Västfjäll, Daniel - 2019

experiment with a large representative sample (N = 1,832), we vary whether risky choices are induced to be based on either …

Persistent link: https://www.econbiz.de/10012141901

The Decision Maker Matters: Individual versus Group Behaviour in Experimental Beauty-Contest Games

Kocher, Martin G.; Sutter, Matthias - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2004

Economics has devoted little attention so far as to whether the type of decision maker matters for economic decisions. However, many important decisions like those on monetary policy or a company’s business strategy are made by (small) groups rather than an individual. We compare behaviour of...

Persistent link: https://www.econbiz.de/10005866848

Individual versus group behavior and the role of the decision making procedure in gift-exchange experiments

Kocher, Martin G.; Sutter, Matthias - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2002

We test for behavioral differences between groups and individuals in gift-exchange experiments. Related studies establish group behavior as typically closer to the game-theoretic equilibrium. We show that this result my depend crucially on the decision making procedure within groups. A novel...

Persistent link: https://www.econbiz.de/10005867021

Illusion of control as a source of poor diversification: Anexperimental approach

Fellner, Gerlinde - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2004

This paper investigates factors influencing individual portfolio allocations withparticular focus on the role of illusion of control. By forming their portfolio of tworisky lotteries and one risk-less alternative, subjects are requested to reach a targetinvestment profit, whereby equal...

Persistent link: https://www.econbiz.de/10005866777

Illusion of Expertise in Portfolio Decisions:An Experimental Approach

Fellner, Gerlinde; Güth, Werner; Maciejovsky, Boris - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2001

This paper focuses on egocentric biases in financial decisions. Subjects first designa portfolio, whereby each combination of assets yields the same expected returnand variance of returns. They are then confronted with two alternative portfolios;the average portfolio and the portfolio of one’s...

Persistent link: https://www.econbiz.de/10005867327