Overconfident Trading of Asian Investors
نویسندگان
چکیده
This study investigates whether Asian investors trade overconfidently and what factors affect their overconfident trading based on the theoretical predictions of Gervais and Odean (2001) that market gains make investors trade overconfidently in subsequent periods. We find that Asian investors trade more aggressively subsequent to both domestic and U.S. market gains and their overconfident trading corresponds to underestimate exchange rate risks. Moreover, we find that Asian investors’ overconfident trading is affected both by the market states and by biased self-attribution. Although the results regarding Asian investors’ overconfident trading conditional on the market states are mixed, the results regarding the impact of biased self-attribution on Asian investors’ overconfident trading, in general, are consistent with the theoretical predictions.
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