Can information alleviate overconfidence? A randomized experiment on financial market predictions

Takanori Ida and Ryo Okui

Discussion papers from Graduate School of Economics , Kyoto University

Abstract: In this study, we examine how information provision a ects the degree of overcon dence using an online experiment. The 4,210 experimental participants engaged in stock market prediction exercises were asked to evaluate their absolute and relative performance. We conducted a randomized controlled trial such that randomly selected participants obtained information about their own performance and/or the distribution of others' performances before evaluating their performances. We nd that while participants exhibit overcon dence bias, this can be alleviated by information provision and that the e ect of the elimination of overcon dence is stronger when only partial information, rather than complete information, is provided. Further, the results indicate that the mere provision of information, even if it is consistent with prior beliefs, decreases the degree of overcon dence.

Keywords: Overcon dence; information provision; randomized controlled trial; online experiment; stock market prediction. (search for similar items in EconPapers)
JEL-codes: C91 D83 D91 G41 (search for similar items in EconPapers)
Pages: 39
Date: 2019-10
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.econ.kyoto-u.ac.jp/dp/papers/e-19-005.pdf (application/pdf)

Related works:
Working Paper: Can information alleviate overconfidence? A randomized experiment on financial market predictions (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kue:epaper:e-19-005

Access Statistics for this paper

More papers in Discussion papers from Graduate School of Economics , Kyoto University Contact information at EDIRC.
Bibliographic data for series maintained by Graduate School of Economics Project Center ().