Information, Overconfidence and Trading: Do the Sources of Information Matter?
Sep 21, 2012
Articles in journals
Abreu, M., Mendes, V.
We investigate how the strength of the positive association between frequency of trading and information acquisition is dependent on the sources of information used by investors and on investors’ overconfidence. We add to the existing literature by investigating if the positive relationship between investment in information and intensity of trading in financial assets is sensitive to the sources of information used by investors, and if this influence is different for overconfident and non-overconfident investors. Our results confirm the classical statement that the more frequently individual investors invest in information, the more they trade in financial products. They also confirm behavioral finance findings that overconfident
Information,Overconfidence,Investor behavior,Trading,Sources of information,