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Boys will (still) be boys: Gender differences in trading activity are not due to differences in confidence

Author

Listed:
  • Carlos Cueva Herrero

    (Dpto. Análisis Económico Aplicado)

  • Iñigo Iturbe-Ormaetxe Kortajarene

    (Universidad de Alicante)

  • Giovanni Ponti

    (Universidad de Alicante)

  • Josefa Tomás Lucas

    (Universidad de Alicante)

Abstract

The fact that men trade more than women in financial markets has been attributed to men’s overconfidence. However, evidence supporting this view is only indirect. We directly test this conjecture experimentally, by measuring confidence using monetary incentives before participants trade in a simulated market. We find that men are more confident and trade more than women, but we do not find that the difference in confidence explains the gender gap in trading activity. We explore alternative candidate channels such as risk aversion, financial literacy or competitiveness but find that these factors are also unlikely to play a role.

Suggested Citation

  • Carlos Cueva Herrero & Iñigo Iturbe-Ormaetxe Kortajarene & Giovanni Ponti & Josefa Tomás Lucas, 2017. "Boys will (still) be boys: Gender differences in trading activity are not due to differences in confidence," Working Papers. Serie AD 2017-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2017-06
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Behavioral Finance; Overconfidence; Overtrading;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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