Behavioural Finance: Investors Self Attribution and Overconfidence

Self attribution and overconfidence both are behavioural finance principles, from which investors suffer. In this paper, an examination has been made to discover the mental qualities like Risk Aversion, Regret, Overconfidence and Self Attribution biases of the investors. The present study concludes whether investor’s behaviour is rational as presumed under the efficient market hypothesis or investor suffers from self attribution or overconfidence biases. These biases are profound established in investors and can be ascribed to their gender, age and their association in the market. The study finds out that some of the investor having overconfidence bias is higher than those having self attribution bias. Overconfidence bias is reduced with the age and gender, while self attribution bias is increasingly overwhelming among the investors.