The Dynamics of Overconfidence: Evidence from Stock Market Forecasters

Richard Deaves (1, 2) , Erik Lüders , Michael Schröder (2)

1 McMaster University [Hamilton, Ontario]
2 Center for European Economic Research (ZEW)

As a group, market forecasters are overconfident in the sense that they are miscalibrated. While overconfidence is persistent, respondents do exhibit some degree of rational learning in that they widen confidence intervals after failure as much as they narrow them after success. Market experience exacerbates overconfidence, primarily through knowledge deterioration.

Mots clés: Social Sciences & Humanities

Domaines: Économie et finance quantitative [q-fin]

Richard Deaves, Erik Lüders, Michael Schröder. The Dynamics of Overconfidence: Evidence from Stock Market Forecasters. Journal of Economic Behavior and Organization, 2010, 75 (3), pp.402. ⟨10.1016/j.jebo.2010.05.001⟩. ⟨hal-00849407⟩