Investors with 'overconfidence' bias make risky investments

March 20, 2015 2:09 PM

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Investors with 'overconfidence' bias make risky investments

Researchers at Queensland University of Technology provided evidence with an investment game. But before having participants spread a hypothetical portfolio across a mix of bonds, hybrid securities and stock shares, researchers gave players a series of personality and behavioral tests.

The results of tests and game showed that investors with 'illusion of control' and 'overconfidence' biases were more likely to make risky investments and allocate a greater portion of the portfolio to complex hybrid securities.

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