Overconfidence in finance: overview and trends

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.