Work

Online Investors: Do the Slow Die First?

Year: 2002

Type: article

Abstract: We analyze 1,607 investors who switched from phone-based to online trading during the 1990s. Those who switch to online trading perform well prior to going online, beating the market by more than 2% annually. After going online, they trade more actively, more speculatively, and less profitably than before—lagging the market by more than 3% annually. Reductions in market frictions (lower trading costs, improved execution speed, and greater ease of access) do not explain these findings. Overconfidence—augmented by self-attribution bias and the illusions of knowledge and control—can explain the increase in trading and reduction in performance of online investors.

Source: Review of Financial Studies

DOI: 10.1093/rfs/15.2.455

Authors: Brad M. Barber, Terrance Odean

Institutions: University of California, Davis, University of California, Berkeley

Language: German

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3122842831

FWCI: 22.87

Cites: 72

Cited by: 767

Related to: 10