Sensation Seeking, Overconfidence, and Trading Activity
Year: 2009
Type: article
Study design: Observational Study
Abstract: ABSTRACT This study analyzes the role that two psychological attributes—sensation seeking and overconfidence—play in the tendency of investors to trade stocks. Equity trading data from Finland are combined with data from investor tax filings, driving records, and mandatory psychological profiles. We use these data, obtained from a large population, to construct measures of overconfidence and sensation seeking tendencies. Controlling for a host of variables, including wealth, income, age, number of stocks owned, marital status, and occupation, we find that overconfident investors and those investors most prone to sensation seeking trade more frequently.
Source: The Journal of Finance
Authors: MARK GRINBLATT, MATTI KELOHARJU
Institution: University of California, Los Angeles
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2890567002