Investor decision-making requires an absence of bias and appropriate levels of risk-taking. In this study we investigate whether investors are prone to take risks, both in terms of how they rate their risk propensity and their behavior in choosing between options with different risk levels, and whether they display overconfidence and underdog bias. We also investigate the relationships among underdog bias, overconfidence and risk propensity. The results indicate overconfidence levels similar to that in other populations and do not reveal underdog bias or high levels of risk propensity. We found support for a negative predictive relationship between underdog bias and overconfidence. Further findings reveal that the highest self-ratings appeared for those with most investment experience, and females displayed higher underdog bias than men. The findings hold implications for the development of self-perception in investors.

No abstract