Journal article
On the survival of overconfident traders in a competitive securities market
Abstract
Recent research has proposed several ways in which overconfident traders can persist in competition with rational traders. This paper offers an additional reason: overconfident traders do better than purely rational traders at exploiting mispricing caused by liquidity or noise traders. We examine both the static profitability of overconfident versus rational trading strategies, and the dynamic evolution of a population of overconfident, …
Authors
Hirshleifer D; Luo GY
Journal
Journal of Financial Markets, Vol. 4, No. 1, pp. 73–84
Publisher
Elsevier
Publication Date
January 2001
DOI
10.1016/s1386-4181(00)00014-8
ISSN
1386-4181