Experimental Studies of Overconfidence in Financial Markets

Michailova, Julija

This doctoral thesis investigates the influence of overconfidence on the outcomes in experimental asset markets, both on the market and individual levels. Thesis consists of three parts. In the first part an instrument (test) is developed that is later used in economic experiments to measure subjects’ overconfidence. The second part investigates the role of market overconfidence in the occurrence of bubbles in asset prices and the emergence of other stylized facts of financial markets, namely excessive trade and excessive price volatility. In the third part, the influence of overconfidence and risk aversion on financial decision making of economic subjects is analyzed.

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Michailova, Julija: Experimental Studies of Overconfidence in Financial Markets. 2010.

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