Potential underdog bias, overconfidence and risk propensity in investor decision-making behavior
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Date
Authors
Combrink, Sean
Lew, Charlene
Journal Title
Journal ISSN
Volume Title
Publisher
Routledge
Abstract
In this study we investigate whether investors are prone to take risks, both in terms of how they rate their risk propensity and their behavior in choosing between options with different risk levels, and whether they display overconfidence and underdog bias. We also investigate the relationships among underdog bias, overconfidence and risk propensity. The results indicate overconfidence levels similar to that in other populations and do not reveal underdog bias or high levels of risk propensity. We found support for a negative predictive relationship between underdog bias and overconfidence.
Description
Keywords
Investor decision-making, Risk propensity, Underdog bias, Overconfidence, Decision bias
Sustainable Development Goals
Citation
Combrink, S. & Lew, C. 2020, 'Potential underdog bias, overconfidence and risk propensity in investor decision-making behavior', Journal of Behavioral Finance, 21(4):337-351, doi:10.1080/15427560.2019.1692843.