Disposed to be Overconfident

21 May 2024

13:15 -14:30

Times are shown in local time.

Open to: All

Room W2.02 (Cambridge Judge Business School)

Trumpington St



United Kingdom

Join our Finance seminar

Finance seminar.

Speaker: Dr Katrin Gödker, Bocconi University

About the seminar topic

We show that the disposition effect – the tendency of investors to hold losers and sell winners – can be a source of overconfidence. We find experimental evidence that individuals update beliefs about their own investment ability based on realized gains and losses rather than the overall performance of their portfolio. We also find supporting field evidence.

Dutch retail investors who realized more gains than losses believe they have higher portfolio performance relative to other investors, even after controlling for their actual portfolio performance. We develop a formal model demonstrating how the disposition effect leads to overconfidence and examine model implications for investors’ trading behaviour and expected profit.

Speaker bio

Katrin Gödker is an Assistant Professor of Finance at Bocconi University and a CESifo & IGIER Affiliate.  She is an empiricist working in the field of Behavioural Finance. Much of her work studies investor beliefs and how they affect investor behaviour using experiments (lab, online, and field) as well as archival datasets.


No registration required. If you have any questions about this seminar, please email Emily Brown.