Lestari, Winda Rika and Kufepaksi, Mahatma and Hasnawati, Sri OVERCONFIDENCE INVESTORS IN INDONESIA'S SHARIA CAPITAL MARKET: Experimental Study. ECONOMIC ANNALS-XXI. ISSN 1728-6239 (Submitted)

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Abstract

Investors who have high overconfidence indicated by a high rate of miscalculation will tend to overestimate the price of securities so that they unknowingly buy securities at a higher price or sell securities at a price lower than their fundamental value, causing transaction losses. This paper discusses the overconfident and predictive accuracy of stock prices in the Indonesian Islamic capital market with an experimental laboratory setting to observe investor responses when they receive valuable information. The research design classifies investors into three groups based on overconfidence scores. This study uses two types of treatment, namely market conditions without information and markets receiving bad news. The results show that overconfident investors tend to overestimate the accuracy of their knowledge and information so that they produce higher average and error price predictions than investors who are low overconfident across all experimental market sessions. This evidence suggests that highly confident investors engage in self-deceptive behavior. The results also show that investors who are overconfident do not always suffer losses even though they have higher average prediction errors or prices than investors who are overconfident low. Keywords: Overconfident, self-deception, price error (prediction), transaction loss

Item Type:	Article
Subjects:	H Social Sciences > HG Finance
Divisions:	Fakultas Ekonomi dan Bisnis (FEB) > Prodi Manajemen
Depositing User:	MAHATMA KU
Date Deposited:	12 Apr 2023 08:54
Last Modified:	12 Apr 2023 08:54
URI:	http://repository.lppm.unila.ac.id/id/eprint/50384

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