Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70117
Authors: 
Pütz, Alexander
Ruenzi, Stefan
Year of Publication: 
2010
Series/Report no.: 
CFR Working Paper 08-08 [rev.]
Abstract: 
We examine overconfidence among equity mutual fund managers. While overconfidence has been extensively documented among retail investors, evidence from professional investors is scarce. Consistent with theories of overconfidence, we find that fund managers trade more after good past performance. The higher trading activity after good performance is driven by individual portfolio performance, while the market performance has no significant impact. We rule out some alternative explanations for our results like increased trading as a response to tournament incentives, as a response to inflows, or as a rational reaction due to managerial learning about abilities.
Subjects: 
professional investors
overconfidence
behavioral biases
mutual funds
JEL: 
D83
G10
G12
Document Type: 
Working Paper

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