Online Investors: Do the Slow Die First?

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ID: 305587
2002
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Abstract
We analyze 1,607 investors who switched from phone-based to online trading during the 1990s. Those who switch to online trading perform well prior to going online, beating the market by more than 2% annually. After going online, they trade more actively, more speculatively, and less profitably than before—lagging the market by more than 3% annually. Reductions in market frictions (lower trading costs, improved execution speed, and greater ease of access) do not explain these findings. Overconfidence—augmented by self-attribution bias and the illusions of knowledge and control—can explain the increase in trading and reduction in performance of online investors.
Reference Key
openalex_W3122842831 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Brad M. Barber, Terrance Odean
Journal review of financial studies
Year 2002
DOI
10.1093/rfs/15.2.455
URL
https://doi.org/10.1093/rfs/15.2.455
Keywords Keywords not found

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