The proposition that investors are overconfident about their valuation and trading skills can explain high observed trading volume. With biased self-attribution, the level of investor overconfidence and thus trading volume varies with past returns. We test the trading volume predictions of...

High market-wide returns make some investors overconfident because they incorrectly attribute the gains to their stock picking talents. Investors who are subject to biased self-attribution increase their trading in subsequent periods in models by Gervais and Odean (2001) and Odean (1998a). We...

The proposition that investors are overconfident about their valuation and trading skills can explain high observed trading volume. With biased self-attribution, the level of investor overconfidence and thus trading volume varies with past returns. We test the trading volume predictions of...