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JACIII Vol.14 No.6 pp. 661-668
doi: 10.20965/jaciii.2010.p0661
(2010)

Paper:

Effect of Overconfident Investor Behavior to Stock Market

Ryota Inaishi, Kaoru Toya, Fei Zhai,
and Eisuke Kita

Graduate School of Information Science, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan

Received:
January 31, 2010
Accepted:
July 15, 2010
Published:
September 20, 2010
Keywords:
overconfident bias, overoptimism, artificial market simulation, rising trend
Abstract

Behavioral finance theory has been presented to explain the phenomena not explainable by conventional finance theory based on efficient market hypothesis from the investor psychology. We focused on overconfidence – an important psychological bias –, and analyzed the effect of overconfident investor behavior in stock market using multiagent simulation. We found that, based on the increase in overconfident market investors, market dealing increases and rising trends occur more often. An analysis of the relationship between overconfidence and rising trends shows that rising trends make investors even more overconfident.

Cite this article as:
R. Inaishi, K. Toya, F. Zhai, and <. Kita, “Effect of Overconfident Investor Behavior to Stock Market,” J. Adv. Comput. Intell. Intell. Inform., Vol.14, No.6, pp. 661-668, 2010.
Data files:
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