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Published in:
2009 | OriginalPaper | Chapter
The Effect of Subjective Risk Attitudes and Overconfidence on Risk Taking Behaviors: A Experimental Study Based on Traders of the Chinese Stock Market
Authors : Qi-an Chen, Yinghong Xiao, Hui Chen, Liang Chen
Published in: Cutting-Edge Research Topics on Multiple Criteria Decision Making
Publisher: Springer Berlin Heidelberg
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Our research analyzes the effect of the traders’ subjective risk attitude, optimism and overconfidence on their risk taking behaviors on the Chinese Stock Market by experimental study method. We find that investors’ risk taking behavior is significantly affected by their subjective risk attitude, optimism and overconfidence. Our results also argue that the objective return and volatility of stock are not as good predictors of risk taking behavior as subjective risk and return measures. Moreover, we illustrate that overconfidence and optimism have an significant impact on risk taking behavior In line with theoretical models.