Kufepaksi, Mahatma (2010) The Effect of Feedback on Overconfident Investors, Experimental Evidences of Self Deception in Indonesian Capital Market. International Journal of Business and Management Invention, 2 (1). ISSN 2070-8521

Preview

Text ContentServer.pdf Download (103kB) | Preview

Abstract

Research in psychology concludes that overconfidence reflects self deception. Such behavior may not only reveal in the daily life but also in the capital market. Empirical research shows that overconfident investors tend to overvalue the price of the securities so that they unconsciously buy the securities at a higher price or sell the securities at a lower price than their fundamental values leading to transaction losses. According to this experimental research design, all investors are classified into three groups based on their levels of overconfidence, namely the rational, the less, and the more informed investors. The result shows that when a feedback in the form of a guidance of securities prediction is given, the less informed investors tend to assess the precision of their knowledge and information excessively so that they increase price error, but the more informed investors tend to reduce it. Keywords: Overconfidence; Self-deception; Feedback; Price error

Item Type:	Article
Subjects:	H Social Sciences > H Social Sciences (General)
Divisions:	Fakultas Ekonomi dan Bisnis (FEB) > Prodi Manajemen
Depositing User:	MAHATMA KU
Date Deposited:	02 Jun 2017 04:01
Last Modified:	02 Jun 2017 04:01
URI:	http://repository.lppm.unila.ac.id/id/eprint/2945

Actions (login required)

View Item