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BOYSWILLBEBOYS:GENDER,OVERCONFIDENCE ...
BOYSWILLBE BOYS:GENDER,OVERCONFIDENCE,ANDCOMMONSTOC KINVESTMENT*BRADM. BARBERANDTERRANCEODEANT heoreticalmodelspredictthat overcon this predictionby partitioninginvestorson ,in areassuchas nance,menare moreovercon ,theorypredictsthatmenwill over35,000householdsfroma largediscountbrokerage,we analyzethe commonstockinvestmentsof menand documentthatmentrade45 s net returnsby yearasopposedto s not whata mandon t knowthat makeshim a fool, but whathe doesknowthatain t ,nineteenthcenturyAmericanhumoristIt is dif cult to reconcilethe volumeof tradingobservedinequitymarketswiththe tradingneedsof ,rebalancetheirportfolios,andtradeto superiorinfor-mationmaytradespeculativel y,althoughrationalspeculativetraderswill generallynot chooseto isunlikelythat rationaltradingneedsaccountfor a turnoverrate of76 percenton the NewYorkStockExchangein believethereis a simpleand powerfulexplanationforhighlevelsof tradingon nancialmarkets:overcon overcon dentabouttheirabilities,theirknowl-edge, and [1998]showsthatover-con dentinvestors whobelievethatthe precisionof theirknowledgeaboutthe valueof a securityis greaterthanit actually* We are gratefulto the discountbrokerage rm thatprovidedus withthedatafor this studyand gratefulto PaulThomas,DavidMoore,PaineWebber,andthe GallupOrganizationfor appreciatethe commentsof DianeDel Guercio,DavidHirshleifer,AndrewKarolyi,T imothyLoughran,EdwardOptonJr.
womendoin”nancialmatters[Prince1993].Indeed,casualob-servationrevealsthatmenaredisproportionatelyrepresentedin the”nancialindustry.Weexpect,therefore,thatmenwillgen-
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