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Overconfident Investors, Predictable Returns, and Excessive Trading / Kent Daniel, David Hirshleifer.
- Format:
- Book
- Author/Creator:
- Daniel, Kent.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w21945.
- NBER working paper series no. w21945
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2016.
- Summary:
- Individuals and asset managers trade aggressively, resulting in high volume in asset markets, even when such trading results in high risk and low net returns. Asset prices display patterns of predictability that are difficult to reconcile with rational expectations-based theories of price formation. This paper discusses how investor overconfidence can explain these and other stylized facts. We review the evidence from psychology and securities markets bearing upon overconfidence effects, and present a set of overconfidence based models that are consistent with this evidence.
- Notes:
- Print version record
- January 2016.
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