Elena Pikulina|Luc Renneboog|Philippe N. Tobler
Overconfidence and investment: An experimental approach
University of British Columbia|Tilburg University|University of Zurich
positive relation overconfidence investment provision theoretically justified practically assumed literature thoroughly investigated test confirm positive relation direct measures overconfidence ones financial knowledge choice investment precisely strong overconfidence results excess investment underconfidence induces underinvestment whereas moderate overconfidence leads accurate investments experimental results based different subject pools financial professionals students different media computer paper webbased degree ones overestimation ones individual financial knowledge relative ones actual knowledge well relative knowledge peers explains investment decisions better ones actual knowledge relation overconfidence investment robust degree individual risk aversion riskiness investment projects changes incentives structure