Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185751
Authors: 
Kocher, Martin
Lucks, Konstantin
Schindler, David
Year of Publication: 
2018
Series/Report no.: 
Discussion Paper No. 81
Abstract: 
One explanation for overpricing on asset markets is a lack of traders\' self-control. Self-control is the individual capacity to override or inhibit undesired impulses that may drive prices. We implement the first experiment to address the causal relationship between self-control abilities and systematic overpricing on financial markets. Our setup can detect some of the channels through which individual self-control restrictions could transmit into irrational exuberance in markets. Our data indicate a large direct effect of restricted self-control abilities on market overpricing. Low self-control traders report stronger emotions after the market.
Subjects: 
behavioral finance
trader behavior
self-control
experimental asset markets
overpricing
JEL: 
G02
G11
G12
D53
D84
Document Type: 
Working Paper

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