The Degree of Overconfidence - Examining finance and non-finance oriented business students

Abstract

We examine the degree of overconfidence among finance and non-finance oriented business students, taking into account all the three overconfidence types; overprecision, overestimation and overplacement. We first investigate whether the degree of overconfidence among the business students increases when the education goes from being non-finance to finance oriented. Second, we test for possible self-selection effects. We find that only the degree of Overestimation increases among the business students; finance oriented students being more confident. The outcomes regarding Overprecision and Overplacement are not significant. Moreover, self-section does not seem to explain the outcome regarding Overestimation and there does not appear to be any self-selection effect on gender either, when comparing the finance oriented students to the non-finance oriented students.