Overconfidence and Excessive Trading Behavior: An Experimental Study

摘要

The main objective of the research is to examine the excessive trading hypothesis, investors who have higher udoverconfidence shown by high miscalibration levels will tend to practice aggresive and excessive trading udstrategy. It is an experimental research which combines both between and within subject design. The participants udare undergraduate students who have already taken financial management course but have not yet invest in real udcapital market. The result of the research shows that high overconfidence investors have higher trading activity udthan low overconfidence investor. The other result shows that among high overconfidence investors, there is no udtrading activity differences between pre and post bad news, whereas among low overconfidence investors, the udexistence of bad news cause trading activity to decrease in the post bad news period. Then, the investment udreturns of high overconfidence investors is significantly lower than that of the low overconfidence investors.