The Library
Overconfidence, position size, and the link to performance
Tools
Tools
Tools
Forman, John and Horton, Joanne (2019) Overconfidence, position size, and the link to performance. Journal of Empirical Finance, 53 . pp. 291-309. doi:10.1016/j.jempfin.2019.08.001
|
PDF
WRAP-overconfidence-position-size-link-performance-Horton-2019.pdf - Accepted Version - Requires a PDF viewer. Available under License Creative Commons Attribution Non-commercial No Derivatives 4.0. Download (1220Kb) | Preview |
Official URL: http://dx.doi.org/10.1016/j.jempfin.2019.08.001
Abstract
The overconfidence literature employs activity metrics such as account turnover and trade frequency to link misattribution/self-attribution to excess trading. In this paper we argue relative position size is a more meaningful indicator of overconfidence. Using a sample of retail traders, we find that when traders take relatively larger positions they make more impaired trade entry/exit timing decisions. The opposite is seen when they trade more frequently. We also observe that more sophisticated and experienced traders trade relatively smaller positions and exhibit less overconfidence, consistent with these individuals suffering fewer behavioral biases, for which a likely learning effect is observed.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
||||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School |
||||||||
| Library of Congress Subject Headings (LCSH): | Confidence -- Economic aspects, Decision making, Retail trade, Performance, Turnover (Business) | ||||||||
| Journal or Publication Title: | Journal of Empirical Finance | ||||||||
| Publisher: | Elsevier | ||||||||
| ISSN: | 0927-5398 | ||||||||
| Official Date: | September 2019 | ||||||||
| Dates: |
|
||||||||
| Volume: | 53 | ||||||||
| Page Range: | pp. 291-309 | ||||||||
| DOI: | 10.1016/j.jempfin.2019.08.001 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access |
Request changes or add full text files to a record
Repository staff actions (login required)
 |
View Item |
Downloads
Downloads per month over past year
