Volume, Volatility, Price, and Profit When All Traders Are Above Average

摘要: People are overconfident. Overconfidence affects financial markets. How depends on who in the market is overconfident and how information distributed. This paper examines markets which price-taking traders, a strategic-trading insider, risk-averse marketmakers increases expected trading volume, depth, decreases utility of traders. Its effect volatility price quality depend Overconfident traders can cause to underreact rational Markets also abstract, statistical, highly relevant information, they overreact salient, anecdotal, less information.