Online Investors: Do the Slow Die First?
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. Copyright 2002, Oxford University Press.
Year of publication: |
2002
|
---|---|
Authors: | Barber, Brad M. ; Odean, Terrance |
Published in: |
Review of Financial Studies. - Society for Financial Studies - SFS. - Vol. 15.2002, 2, p. 455-488
|
Publisher: |
Society for Financial Studies - SFS |
Saved in:
Saved in favorites
Similar items by person
-
Call for Papers--Special Issue of Management Science: Behavioral Economics and Finance
Barber, Brad M., (2010)
-
Good Reasons Sell: Reason-Based Choice Among Group and Individual Investors in the Stock Market
Barber, Brad M., (2003)
-
Call for Papers--Special Issue of Management Science: Behavioral Economics and Finance
Barber, Brad M., (2010)
- More ...