Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/321487 
Year of Publication: 
2024
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 12 [Issue:] 1 [Article No.:] 2348543 [Year:] 2024 [Pages:] 1-19
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
The literature on overconfidence has witnessed prolific growth since the beginning of the century. This context underscores the necessity to comprehend and categorize an increasingly diverse body of overconfidence research within the financial domain. This study reviews existing literature on financial overconfidence from its inception to the present with a detailed review of 132 articles from 84 journals by examining theories, context, and methods (TCM) used in overconfidence research. Our review unpacks significant themes (i.e. determinants of overconfidence, overconfidence and risk-taking, overconfidence measures and type of investors, overconfidence in a volatile market, overconfidence, and personal financial behavior). We propose a pertinent research framework to investigate the less investigated aspects of financial overconfidence and suggest future research direction. The significance of this paper lies in its potential to deepen our understanding of how psychological biases and significant overconfidence influence investment behavior and market outcomes. By synthesizing findings from multiple studies, this literature review highlights common themes, identifies gaps in knowledge, and suggests avenues for future research. Ultimately, insights gained from such a review can inform investors, financial professionals, and policymakers about the importance of recognizing and addressing overconfidence in investment decision-making processes. This understanding can lead to more informed and rational investment strategies, potentially mitigating the adverse effects of overconfidence on individual investors and market efficiency.
Subjects: 
Overconfidence
bibliomet-ric
decision-making
clusters
investor behavior
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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