nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2017‒11‒19
two papers chosen by
  1. Boys will (still) be boys: Gender differences in trading activity are not due to differences in confidence By Carlos Cueva Herrero; Iñigo Iturbe-Ormaetxe Kortajarene; Giovanni Ponti; Josefa Tomás Lucas
  2. Potterian Economics By Daniel Levy; Avichai Snir
  1. By: 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.
    Keywords: Behavioral Finance, Overconfidence, Overtrading
    JEL: C91 D70 D81 D91
    Date: 2017–10
    URL: http://d.repec.org/n?u=RePEc:ivi:wpasad:2017-06&r=fle
  2. By: Daniel Levy (International School of Economics at Tbilisi State University; Department of Economics, Bar-Ilan University; Department of Economics, Emory University; Rimini Center for Economic Analysis, ITALY;); Avichai Snir (Department of Banking and Finance, Netanya Academic College, Netanya 42365, ISRAEL)
    Abstract: Recent studies in psychology and neuroscience find that fictional works exert strong influence on readers and shape their opinions and worldviews. We study the Potterian economy, which we compare to economic models, to assess how Harry Potter books affect economic literacy. We find that some principles of Potterian economics are consistent with economists’ models. Many others, however, are distorted and contain numerous inaccuracies, which contradict professional economists’ views and insights, and contribute to the general public’s biases, ignorance, and lack of understanding of economics.
    Keywords: Economic and Financial Literacy, Political Economy, Public Choice, Rent Seeking, Folk Economics, Harry Potter, Social Organization of Economic Activity, Literature, Fiction, Potterian Economy, Potterian Economics, Popular Opinion
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:tbs:wpaper:17-002&r=fle
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