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Information, overconfidence and trading: Do the sources of information matter?

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  • Abreu, Margarida
  • Mendes, Victor

Abstract

We investigate how the strength of the positive association between frequency of trading and information acquisition is dependent on the sources of information used by investors and on investors’ overconfidence. We add to the existing literature by investigating if the positive relationship between investment in information and intensity of trading in financial assets is sensitive to the sources of information used by investors, and if this influence is different for overconfident and non-overconfident investors.

Suggested Citation

  • Abreu, Margarida & Mendes, Victor, 2012. "Information, overconfidence and trading: Do the sources of information matter?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 868-881.
    • Handle: RePEc:eee:joepsy:v:33:y:2012:i:4:p:868-881
    DOI: 10.1016/j.joep.2012.04.003
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    More about this item

    Keywords

    Information; Overconfidence; Investor behavior; Trading; Sources of information;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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