5 research outputs found
Overconfidence and financial decision making - the impact of financial risk tolerance on confidence judgments
A wide range of research has shown that people are overconfident in their judgments
displaying a contradiction to modern economic theories supposing individuals as rational
agents with the goal of maximizing expected utility and minimizing risk exposure. However,
overconfident agents overestimate their judgments and expertise or presume themselves to be
better than their peers leading those individuals to exhibit a higher willingness to engage in
risky behaviors. So, it can be expected that overconfidence and financial risk tolerance are
positively associated with each other. A sample consisting of 137 people was analyzed with
the result that there is no evidence supporting this hypothesis, neither in a group level nor on
an individual basis. The degrees of overconfidence and risk tolerance are not correlated.
Nevertheless, financial risk tolerance has a significant positive correlation on observed level
of confidence, whereas accuracy of judgments is not significantly affected by the degree of
risk tolerance
the impact of financial risk tolerance on confidence judgments
A wide range of research has shown that people are overconfident in their judgments
displaying a contradiction to modern economic theories supposing individuals as rational
agents with the goal of maximizing expected utility and minimizing risk exposure. However,
overconfident agents overestimate their judgments and expertise or presume themselves to be
better than their peers leading those individuals to exhibit a higher willingness to engage in
risky behaviors. So, it can be expected that overconfidence and financial risk tolerance are
positively associated with each other. A sample consisting of 137 people was analyzed with
the result that there is no evidence supporting this hypothesis, neither in a group level nor on
an individual basis. The degrees of overconfidence and risk tolerance are not correlated.
Nevertheless, financial risk tolerance has a significant positive correlation on observed level
of confidence, whereas accuracy of judgments is not significantly affected by the degree of
risk tolerance