Overconfidence in finance: overview and trends

Mário Pedro Ferreira

doi:10.1016/B978-0-12-811252-6.00006-2

Overconfidence in finance: overview and trends

Mário Pedro Ferreira^*

^*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

1 Citation (Scopus)

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Abstract

Overconfidence in financial markets is a controversial topic that has still much to offer. With heated controversy over its very existence and implications since its early days, research on this topic entered into a quiet period after 2008. Higher levels of financial complexity, market regulation and institutional participation alongside with algorithm trading and high frequency trading seem to be apparently driving psychological features away from final trading decisions. This however, does not mean that overconfidence should be neglected, as there are reasons to believe that this psychological bias evolved, became less visible, but is still playing a relevant role in trading decision making.

Original language	English
Title of host publication	Handbook of investors' behavior during financial crises
Editors	Fotini Economou, Konstantinos Gavriilidis, Greg N. Gregoriou, Vasileios Kallinterakis
Publisher	Elsevier Inc.
Pages	101-112
Number of pages	12
ISBN (Electronic)	9780128112533
ISBN (Print)	9780128112526
DOIs	https://doi.org/10.1016/B978-0-12-811252-6.00006-2
Publication status	Published - 1 Jan 2017

Keywords

Investor rationality
Market efficiency
Overconfidence
Price formation
Psychological bias

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10.1016/B978-0-12-811252-6.00006-2

26779992Accepted author manuscript, 156 KBLicence: Unspecified

http://hdl.handle.net/10400.14/43387Licence: Unspecified

Cite this

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KW - Price formation

KW - Psychological bias

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Overconfidence in finance: overview and trends

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Keywords

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