Journal Article

Judgemental Overconfidence, Self-Monitoring, and Trading Performance in an Experimental Financial Market

Bruno Biais, Denis Hilton, Karine Mazurier and Sébastien Pouget

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 72, issue 2, pages 287-312
Published in print April 2005 | ISSN: 0034-6527
Published online April 2005 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/j.1467-937X.2005.00333.x
Judgemental Overconfidence, Self-Monitoring, and Trading Performance in an Experimental Financial Market

More Like This

Show all results sharing these subjects:

  • Information, Knowledge, and Uncertainy
  • Economics

GO

Show Summary Details

Preview

We measure the degree of overconfidence in judgement (in the form of miscalibration, i.e. the tendency to overestimate the precision of one's information) and self-monitoring (a form of attentiveness to social cues) of 245 participants and also observe their behaviour in an experimental financial market under asymmetric information. Miscalibrated traders, underestimating the conditional uncertainty about the asset value, are expected to be especially vulnerable to the winner's curse. High self-monitors are expected to behave strategically and achieve superior results. Our empirical results show that miscalibration reduces and self-monitoring enhances trading performance. The effect of the psychological variables is strong for men but non-existent for women.

Keywords: D81; G11; G14

Journal Article.  13607 words.  Illustrated.

Subjects: Information, Knowledge, and Uncertainy ; Economics

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.