Overconfidence,Ambiguity Aversion And Investor Risk Decision-Experimental Study

In the financial sector,people's decisions often involve risks.For investors,each investment is essentially a risk-making behavior.In the face of unpredictable markets,the choice of risk is undoubtedly the core issue.Behavioral economics research shows that people are often not completely ra-tional in decision-making,and systematic deviations in beliefs or preferences(Tversky and Kahneman,1982),and overconfidence often occurs in deci-sion-making(DeBondt and Thaler,1995).).People tend to trust their abilities too much and overestimate their chances of success.As the research progresses,over-confidence is considered to be "the most testable test."At the same time,many decisions in the financial sector are made under uncer-tainty,and investors tend to be vague and disgusted in the face of "ambiguous".Traditional finance believes that people are rational and the market is complete.People can choose according to the expectation of risk and return to maximize the benefits.In the real market,we can't accurately know the risk situation of the market.The distribution of risk is "ambiguious".In the ambiguious state,the ambiguious attitude of investors plays a certain role.Overconfidence and vague aversion are the concept of personality characteris-tics of two seemingly unrelated individuals.When investors make decisions,will the degree of overconfidence and degree of vague aversion affect investors' risk deci-sions?Is there any correlation between investor overconfidence and vague aversion?Studies have shown that people are generally over-confident.Overconfidence is a common cognitive bias in the current market.The research on overconfidence is mostly empirical research.The selection of overconfidence variables also uses some indirect measure of proxy variables.This is not very close to the essential definition of overconfidence.Relevant scholars have also raised doubts,so there is still a lack of direct research on the impact of overconfidence on individual risk deci-sion-making.At the same time,for the study of ambiguity aversion,domestic re-search is less,and foreign countries mostly use experimental methods.In general,this paper chooses to use laboratory research methods to directly measure the degree of overconfidence and ambiguity aversion of the subjects in the experiment.Study the impact of overconfidence and vague aversion on risk decision behavior.Through the observation of the real market,this paper distinguishes the actual individual investors and institutional investors into two types:"one-on-one" inves-tors and "one-to-many" investors.Investors represent the vast majority of individual investors in the market.They manage their own assets and maximize their personal income by operating their own funds accounts.Their decisions only affect their own income;"one-to-many" investors Mainly refers to another type of investors in the market,institutional investors such as fund managers,who manage other people's assets in the market,and accept other forms of compensation to invest on behalf of others,their decisions affect themselves and many small The income of investors.From the point of view of decision-making gains,the decision of "one-on-one"investors only affects their own returns.The decision of "one-to-many" investors not only affects their own earnings,but also determines the returns of other investors.Obviously,The decisions of these two types of investors are different.Based on this classification,this paper examines whether there is a difference between the two behaviors and proposes to better prevent market risks.In view of the problems of overconfidence,vague aversion and risk deci-sion-making,this paper conducts further research through experimental economics.Through the distinction between real investors,this paper constructs the simplest investment environment and examines whether investors will bring the difference in risk decision behaviors due to overconfidence and vague aversion.In the course of the research,this paper divides the degree of overconfidence in the measurement process into two groups,which are set to the virtual variables of overconfidence,followed by overconfidence and risk decision,ambiguity aversion and risk decision,and overconfidence and ambiguity aversion.Further analysis of the relationship leads to the conclusion of this paper.Overconfident cognitive biases tend to lead to excessive self-confidence in behavior,leading to more risk.For investors' vague and aversive attitudes,vague aversion will affect investors' risks,but a more transparent market environment will be more beneficial to investors' rational decision-making.This paper also examines the relationship between overconfidence and vague aver-sion.It is found that people with a high degree of overconfidence usually believe in their abilities more,and thus the degree of vague aversion is lower,while those with low degree of overconfidence are more disgusted by unconfident behavior.In general,China's securities market is still in the development stage,and many mechanisms are still not perfect.The overconfidence of investors and the cognitive bias of vague aversion will have an impact on investor behavior.Therefore,we need to strengthen the cultivation of rational investors,increase the cultivation of rational market investors,and provide reference for maintaining financial market stability.