Jonas Frey

  Tuesday, 16th October 2018

  13:30 - 14:30

   CESS Seminar Rooms - 3 George Street Mews

   Expectations About Trading Returns and the Self-Attribution Bias

ABSTRACT

Previous research indicates that individual investors are susceptible to the self-attribution bias, namely the tendency to attribute success to internal factors such as skill and to attribute failures to external factors such as chance. However, little is known about how these attributions affect investors’ expectations and behaviour with respect to future trading activities. I conduct an experiment in which subjects can trade in an artificial stockmarket in which trading returns are affected both by skill and by chance. After a first trading round subjects are asked to attribute how strongly their previous return was affected by their skill. Moreover, they are asked for their expectations about a second trading round. This allows me to establish a link between attribution of results and expectations.