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Overconfidence in Investment Decisions: An Experimental Approach Author info | Abstract | Publisher info | Download info | Related research | Statistics Dennis Dittrich ()
Werner Güth ()
Boris Maciejovsky ()
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We experimentally test overconfidence in investment decisions by offering partic- ipants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky as- set, the other with two risky assets. Overconfidence increases (i) with the absolute deviation from optimal choices, (ii) with task complexity, and (iii) decreases with uncertainty as indicated by the difference between willingness to pay and to accept.
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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number
2001-03.
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Length: 21 pages
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Keywords: Risky decision making ; Behavioral finance ; Portfolio choice ; Experimental economics ; Other versions of this item:
Find related papers by JEL classification: C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
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