Proceedings of the Sustainability in emerging economies - Integrating business excellence in management education (SEE-IBEME-2024)

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Overconfidence Bias in Equity Market: A Comparative Analysis of Market Uncertainty and Tranquil Periods in Asian Economies

Authors
Mohit Verma1, 2, *, Mansi Panwar3
1Lecturer, Finance and Accounting, O.P. Jindal Global University, Sonipat, Haryana, India
2Doctoral Scholar, Finance and Accounting Area, Indian Institute of Management, Sambalpur, Odisha, India
3Doctoral Scholar, School of Commerce, Devi Ahilya Vishwavidyalaya, Indore, India
*Corresponding author.
Corresponding Author
Mohit Verma
Available Online 6 May 2025.
DOI
10.2991/978-94-6463-696-3_22How to use a DOI?
Keywords
Overconfidence Bias; Behavioral Finance; Vector Autoregression; Asian Equity Markets
Abstract

The current study aims to examine the phenomenon of overconfidence bias in Asian stock markets, encompassing both market stress and tranquil periods. Utilizing daily data spanning from January 1, 2013, to April 30, 2023, the study employed bivariate vector autoregression (VAR) models and impulse response functions. The findings of the VAR model yield several significant conclusions. First, within our sample period, a notable and substantial correlation between market return and volume seems more prominent in advanced and rapidly expanding emerging markets such as China. Further, investors are more confident in the advanced market during the turbulence caused by the Covid-19 lockdown. The findings indicate that throughout the Russia-Ukraine crisis, Chinese and Thai investors exhibited assertive, overconfident behaviour. The implications of overconfidence bias, which ranges from investor protection to economic stability, demonstrate the significance of understanding and addressing behavioural biases in financial decision-making. This study is one of the early attempts to examine the empirical evidence of overconfidence bias at a cross-country level in the aftermath of the recent global crisis.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the Sustainability in emerging economies - Integrating business excellence in management education (SEE-IBEME-2024)
Series
Advances in Economics, Business and Management Research
Publication Date
6 May 2025
ISBN
978-94-6463-696-3
ISSN
2352-5428
DOI
10.2991/978-94-6463-696-3_22How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Mohit Verma
AU  - Mansi Panwar
PY  - 2025
DA  - 2025/05/06
TI  - Overconfidence Bias in Equity Market: A Comparative Analysis of Market Uncertainty and Tranquil Periods in Asian Economies
BT  - Proceedings of the Sustainability in emerging economies - Integrating business excellence in management education (SEE-IBEME-2024)
PB  - Atlantis Press
SP  - 357
EP  - 375
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-696-3_22
DO  - 10.2991/978-94-6463-696-3_22
ID  - Verma2025
ER  -