Unskilled traders, overconfidence and information acquisition

Authors: Grégoire, Philippe
Abstract: The value of an asset has two components, referred to as obvious and obscure. Unskilled traders are only aware of the obvious component and thus overestimate the precision of the information they may acquire. Unskilled traders are overcon dent when informed and the intensity at which they trade makes researching the obscure component pro table to skilled traders, and this even when research costs are such that no information acquisition takes place in a skilled-only market. Hence overcon dence in our model encourages research by all, including the skilled (rational) traders.
Document Type: Article de recherche
Issue Date: 1 March 2016
Open Access Date: 21 September 2016
Document version: P
Permalink: http://hdl.handle.net/20.500.11794/10168
This document was published in: Journal of Behavioral and Experimental Finance, Vol. 9, 1–5 (2016)
Elsevier B.V.
Alternative version: 10.1016/j.jbef.2015.08.002
Collection:Articles publiés dans des revues avec comité de lecture

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