Meta-Analysis On Overconfidence In Investment Performance Evidence From Global Markets

Abstract

Overconfidence is one of the cognitive biases that can affect investment decisions. Overconfident investors tend to make high-risk and poorly informed investment decisions, which can lead to poor investment performance. This study aims to conduct a meta-analysis to systematically and comprehensively review the effect of excessive confidence on investment performance in global markets. This study aims to conduct a meta-analysis to systematically and comprehensively review the effect of excessive confidence on investment performance in global markets. A literature search is conducted through various scientific databases to identify relevant studies. Inclusion and exclusion criteria are applied to select studies that meet quality and relevance standards. Data were extracted from selected studies and analyzed using meta-analysis statistical methods. The results of the meta-analysis showed that excessive confidence had a significant influence on investment performance with a Hedge's value (d) = 0.703 with a medium effect size criterion. Overconfident investors tend to have portfolios with lower returns and higher risks compared to investors who are not overconfident.