Analysis of the Impact of Individual and External Factors on Overconfidence
Research Article
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Analysis of the Impact of Individual and External Factors on Overconfidence

Di Wen 1*
1 University of Shanghai for Science and Technology
*Corresponding author: dwen1272@gmail.com
Published on 26 November 2025
Volume Cover
AEMPS Vol.243
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-557-8
ISBN (Online): 978-1-80590-558-5
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Abstract

Overconfidence, as a key concept in the field of behavioral finance, plays an indispensable role in optimizing individual decision-making efficiency and elucidating market anomalies. Currently, numerous scholars both domestically and internationally have conducted extensive and in-depth research on the influencing factors of overconfidence. However, there is very little literature that summarizes the influencing factors from both individual and external dimensions. This article organizes and summarizes the influencing factors of overconfidence from both personal and external dimensions, pointing out that individual factors such as age, gender, experience, and past successful experiences will have an impact on overconfidence; external factors such as market cycles and information sources will also have an impact on overconfidence. At the same time, this article points out the direction for subsequent related research. This article aims to provide inspiration for subsequent scholars' related research and help non-financial scholars who want to conduct interdisciplinary research to quickly and comprehensively understand the knowledge of overconfidence.

Keywords:

Overconfidence, age, experience, market cycle, private information

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Wen,D. (2025). Analysis of the Impact of Individual and External Factors on Overconfidence. Advances in Economics, Management and Political Sciences,243,17-22.

References

[1]. Agha, M. and Pramathevan, S. (2023) Executive Gender, Age, and Corporate Financial Decisions and Performance: The Role of Overconfidence. Journal of Behavioral and Experimental Finance, 38, 100-107.

[2]. García, J., Gómez, Y. and Vila, J. (2022) Financial Overconfidence, Promotion of Financial Advice, and Aging. Journal of Business Research, 145, 325-333.

[3]. Wijaya, L. I., Sutejo, B. S. and Tanumulya, G. N. (2024) The Power of Overconfidence and Herding Bias, Investment Sentiment, Over/Underreaction in Influencing SDGs From Investment Decisions. Journal of Lifestyle and SDG's Review, 5, 24-85.

[4]. Hassan, T. R., Khalid, W. and Habib, A. (2014) Overconfidence and Loss Aversion in Investment Decisions: A Study of the Impact of Gender and Age in Pakistani Perspective. Research Journal of Finance and Accounting, 5, 148-157.

[5]. Menkhoff, L., Schmeling, M. and Schmidt, U. (2013) Overconfidence, Experience, and Professionalism: An Experimental Study. Journal of Economic Behavior and Organization, 86, 92-101.

[6]. Onsomu, Z. N. (2015) Effect of Age on Investor Decisions. International Journal of Innovative Research and Development, 4, 120-123.

[7]. Bhandari, G. and Deaves, R. (2006) The Demographics of Overconfidence. The Journal of Behavioral Finance, 7, 5-11.

[8]. Lawrence, E. R., Nguyen, T. D. and Wick, B. (2024) Gender Difference in Overconfidence and Household Financial Literacy. Journal of Banking and Finance, 166, 107-123.

[9]. Kim, K. T., Lee, S. and Kim, H. (2022) Gender Differences in Financial Knowledge Overconfidence Among Older Adults. International Journal of Consumer Studies, 46, 1223-1240.

[10]. Tekçe, B. and Yılmaz, N. (2015) Are Individual Stock Investors Overconfident? Evidence From an Emerging Market. Journal of Behavioral and Experimental Finance, 5, 35-45.

[11]. Mishra, K. C. and Metilda, M. J. (2015) A Study on the Impact of Investment Experience, Gender, and Level of Education on Overconfidence and Self-Attribution Bias. IIMB Management Review, 27, 228-239.

[12]. Yang, X. and Zhu, L. (2016) Ambiguity vs Risk: An Experimental Study of Overconfidence, Gender and Trading Activity. Journal of Behavioral and Experimental Finance, 9, 125-131.

[13]. Kansal, P. and Singh, S. (2018) Determinants of Overconfidence Bias in Indian Stock Market. Qualitative Research in Financial Markets, 10, 381-394.

[14]. Koestner, M., Loos, B., Meyer, S. et al. (2017) Do Individual Investors Learn From Their Mistakes?. Journal of Business Economics, 87, 669-703.

[15]. Hoffmann, A. O. I. and Post, T. (2017) How Return and Risk Experiences Shape Investor Beliefs and Preferences. Accounting and Finance, 57, 759-788.

[16]. Merkle, C. (2017) Financial Overconfidence Over Time: Foresight, Hindsight, and Insight of Investors. Journal of Banking and Finance, 84, 68-87.

[17]. Gervais, S. and Odean, T. (2001) Learning to Be Overconfident. The Review of Financial Studies, 14(1), 1-27.

[18]. Lin, Y. J. (2011) An Empirical Study on the Phenomenon of Overconfidence in China's Stock Market. Market Economy and Price 2, 43-47.

[19]. Ye, J. H. (2014) Corporate Uncertainty, Investor Overconfidence and Asset Growth Anomaly. Management Review, 26, 189-197.

[20]. Shi, Z. and Wang, N. (2013) Don't Confuse Brains With a Bull Market: Attribution Bias, Overconfidence, and Trading Behavior of Individual Investors. EFA 2010 Frankfurt Meetings Paper, 16, 19-27.

[21]. Yang, D. Y. and Peng, B. (2013) Investor Overconfidence and Overtrading: Theoretical Model and Empirical Evidence From My Country's Stock Market. Journal of Central University of Finance and Economics 2, 35-41.

[22]. Shi, Y. D., Wang, J. L. and Hu, D. (2015) Research on the Differences in Overconfidence Between Individual and Institutional Investors in China's Stock Market. Investment Research, 31, 82-96.

[23]. Zhang, R. W., Liao, W. and Nie, H. L. (2013) An Empirical Study on Investor Overconfidence and Stock Prices: From the Perspective of Economic Cycle. Jianghan Forum, 2, 75-79.

[24]. Yasir, M. (2016) Attitude of Pakistan's Individual Investor Towards Risk During Bull and Bear Markets. VFAST Transactions on Education and Social Sciences, 4, 68-80.

[25]. Boussaidi, R. (2022) Implications of the Overconfidence Bias in Presence of Private Information: Evidence From MENA Stock Markets. International Journal of Finance and Economics, 27, 3660-3678.

[26]. Boussaidi, R. (2013) Overconfidence Bias and Overreaction to Private Information Signals: The Case of Tunisia. Procedia-Social and Behavioral Sciences, 81, 241-245.

[27]. Ho, C. M. (2013) Private Information, Overconfidence and Intraday Trading Behaviour: Empirical Study of the Taiwan Stock Market. Applied Financial Economics, 23, 325-345.

[28]. Adam, K., Kuang, P. and Xie, S. (2025) Overconfidence in Private Information Explains Biases in Professional Forecasts. Journal of Monetary Economics, 12, 103-108.

[29]. Goins, S., Cipriano, M. and Gruca, T. S. (2015) Private Information, Overconfidence and Trader Returns in Prediction Markets. The Journal of Prediction Markets, 9, 1-21.

References

[1]. Agha, M. and Pramathevan, S. (2023) Executive Gender, Age, and Corporate Financial Decisions and Performance: The Role of Overconfidence. Journal of Behavioral and Experimental Finance, 38, 100-107.

[2]. García, J., Gómez, Y. and Vila, J. (2022) Financial Overconfidence, Promotion of Financial Advice, and Aging. Journal of Business Research, 145, 325-333.

[3]. Wijaya, L. I., Sutejo, B. S. and Tanumulya, G. N. (2024) The Power of Overconfidence and Herding Bias, Investment Sentiment, Over/Underreaction in Influencing SDGs From Investment Decisions. Journal of Lifestyle and SDG's Review, 5, 24-85.

[4]. Hassan, T. R., Khalid, W. and Habib, A. (2014) Overconfidence and Loss Aversion in Investment Decisions: A Study of the Impact of Gender and Age in Pakistani Perspective. Research Journal of Finance and Accounting, 5, 148-157.

[5]. Menkhoff, L., Schmeling, M. and Schmidt, U. (2013) Overconfidence, Experience, and Professionalism: An Experimental Study. Journal of Economic Behavior and Organization, 86, 92-101.

[6]. Onsomu, Z. N. (2015) Effect of Age on Investor Decisions. International Journal of Innovative Research and Development, 4, 120-123.

[7]. Bhandari, G. and Deaves, R. (2006) The Demographics of Overconfidence. The Journal of Behavioral Finance, 7, 5-11.

[8]. Lawrence, E. R., Nguyen, T. D. and Wick, B. (2024) Gender Difference in Overconfidence and Household Financial Literacy. Journal of Banking and Finance, 166, 107-123.

[9]. Kim, K. T., Lee, S. and Kim, H. (2022) Gender Differences in Financial Knowledge Overconfidence Among Older Adults. International Journal of Consumer Studies, 46, 1223-1240.

[10]. Tekçe, B. and Yılmaz, N. (2015) Are Individual Stock Investors Overconfident? Evidence From an Emerging Market. Journal of Behavioral and Experimental Finance, 5, 35-45.

[11]. Mishra, K. C. and Metilda, M. J. (2015) A Study on the Impact of Investment Experience, Gender, and Level of Education on Overconfidence and Self-Attribution Bias. IIMB Management Review, 27, 228-239.

[12]. Yang, X. and Zhu, L. (2016) Ambiguity vs Risk: An Experimental Study of Overconfidence, Gender and Trading Activity. Journal of Behavioral and Experimental Finance, 9, 125-131.

[13]. Kansal, P. and Singh, S. (2018) Determinants of Overconfidence Bias in Indian Stock Market. Qualitative Research in Financial Markets, 10, 381-394.

[14]. Koestner, M., Loos, B., Meyer, S. et al. (2017) Do Individual Investors Learn From Their Mistakes?. Journal of Business Economics, 87, 669-703.

[15]. Hoffmann, A. O. I. and Post, T. (2017) How Return and Risk Experiences Shape Investor Beliefs and Preferences. Accounting and Finance, 57, 759-788.

[16]. Merkle, C. (2017) Financial Overconfidence Over Time: Foresight, Hindsight, and Insight of Investors. Journal of Banking and Finance, 84, 68-87.

[17]. Gervais, S. and Odean, T. (2001) Learning to Be Overconfident. The Review of Financial Studies, 14(1), 1-27.

[18]. Lin, Y. J. (2011) An Empirical Study on the Phenomenon of Overconfidence in China's Stock Market. Market Economy and Price 2, 43-47.

[19]. Ye, J. H. (2014) Corporate Uncertainty, Investor Overconfidence and Asset Growth Anomaly. Management Review, 26, 189-197.

[20]. Shi, Z. and Wang, N. (2013) Don't Confuse Brains With a Bull Market: Attribution Bias, Overconfidence, and Trading Behavior of Individual Investors. EFA 2010 Frankfurt Meetings Paper, 16, 19-27.

[21]. Yang, D. Y. and Peng, B. (2013) Investor Overconfidence and Overtrading: Theoretical Model and Empirical Evidence From My Country's Stock Market. Journal of Central University of Finance and Economics 2, 35-41.

[22]. Shi, Y. D., Wang, J. L. and Hu, D. (2015) Research on the Differences in Overconfidence Between Individual and Institutional Investors in China's Stock Market. Investment Research, 31, 82-96.

[23]. Zhang, R. W., Liao, W. and Nie, H. L. (2013) An Empirical Study on Investor Overconfidence and Stock Prices: From the Perspective of Economic Cycle. Jianghan Forum, 2, 75-79.

[24]. Yasir, M. (2016) Attitude of Pakistan's Individual Investor Towards Risk During Bull and Bear Markets. VFAST Transactions on Education and Social Sciences, 4, 68-80.

[25]. Boussaidi, R. (2022) Implications of the Overconfidence Bias in Presence of Private Information: Evidence From MENA Stock Markets. International Journal of Finance and Economics, 27, 3660-3678.

[26]. Boussaidi, R. (2013) Overconfidence Bias and Overreaction to Private Information Signals: The Case of Tunisia. Procedia-Social and Behavioral Sciences, 81, 241-245.

[27]. Ho, C. M. (2013) Private Information, Overconfidence and Intraday Trading Behaviour: Empirical Study of the Taiwan Stock Market. Applied Financial Economics, 23, 325-345.

[28]. Adam, K., Kuang, P. and Xie, S. (2025) Overconfidence in Private Information Explains Biases in Professional Forecasts. Journal of Monetary Economics, 12, 103-108.

[29]. Goins, S., Cipriano, M. and Gruca, T. S. (2015) Private Information, Overconfidence and Trader Returns in Prediction Markets. The Journal of Prediction Markets, 9, 1-21.

Cite this article

Wen,D. (2025). Analysis of the Impact of Individual and External Factors on Overconfidence. Advances in Economics, Management and Political Sciences,243,17-22.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of CONF-BPS 2026 Symposium: Innovation, Finance, and Governance for Sustainable Global Growth

ISBN: 978-1-80590-557-8(Print) / 978-1-80590-558-5(Online)
Editor: Canh Thien Dang, Li Chai
Conference website: https://www.confbps.org/Beijing.html
Conference date: 5 March 2026
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.243
ISSN: 2754-1169(Print) / 2754-1177(Online)

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