Overconfidence among market participants - A psychological study of investment behavior

Dr. Thomas Oberlechner, Psychology Department Head of Webster University, Vienna, in cooperation with Carol Osloer of Brandeis University (Waltham, Massachusetts), is investigating the phenomenon of overconfidence in an empirical study of American stock and bond brokers.

Overconfidence is associated with a number of phenomena on the financial market, such as the development of market bubbles. It can also be observed that private investors tend to be too active in their market behavior and that the volatility of stock market prices is exaggerated. Psychological research indicates that human overconfidence is especially strong in those situations in which it is difficult to make exact judgements. However, market decisions are characterized by precisely such situations, where predictions frequently can only be made in probabilities that are near to pure chance. The study, commissioned by PMA Hottinger, seeks to document this behavioral phenomenon with empirical data, making it possible to account for overconfidence in market observation.

The Sigmund Freud Foundation recommended Dr. Oberlechner as the project leader and was also involved in the development of the research project. In the continuing working process, the Foundation functions as an organizational platform and as an interface between PMA Hottinger and the scientific team.

The Sigmund Freud Foundation organized the start event of the cooperative project on 29 November 2007 at the Sigmund Freud Museum and is also preparing its concluding presentation, to which discussion participants from Austria and abroad will be invited. The production of a printed documentation of the project for the clients of PMA Hottinger is also being overseen by the Sigmund Freud Foundation.

Web Interface Classification

Together with the Österreichische Bibliothekenverbund und Service GmbH, the library of the Sigmund Freud Foundation has developed a web interface for displaying classification information with the aim of improving the user-friendliness of research in WebOPAC. This improvement facilitates thematic research according to subject groups in the local online catalog. The labeling of the classifications was set up so as to conform with the library’s existing shelving system.

Both the main categories of the system and the subcategories are represented, and thus catalog users are able to browse the entire catalog inventory conveniently. All of the hits in a given category are displayed by clicking on the classification, and thus they can be called up conveniently.
A new link explains the notations, which until now were only numerological, providing information on group and category. Thus it was necessary to convert the existing notations into 1,718 local data sets – so-called holding sets. In the process, the library’s shelving system, with its more than 200 categories, was optimized and standardized.

An automatic display of category information in the local holding sets is enabled by a newly installed program. Here an Aleph fix doc routine has been implemented, which when the holding set is saved adds the category names to every notation from a database. The individual notations in the local title data sets of the online catalog are displayed both as numbers and as keywords.

Digital Inventory Management

The collection of the Sigmund Freud Foundation is composed of very heterogeneous categories. These include printed matter, manuscripts, memorabilia, artworks, antiquities and visual documents. During recent years it has been possible to digitally catalog the written materials and make them available in an online catalog, and now the same is being done for the nonwritten items in the permanent exhibition and in the depot. With the help of a grant from the Section for Science and Research of the City of Vienna (MA 7), an internet module is being created – on the basis of the existing database on the history of psychoanalysis (PADD) – that provides access to the entire collection in the form of an object database. As a first step, a cataloging template has been developed containing all of the metadata necessary for each object, which will also streamline the lending process. In a second step, the museum objects will be cataloged according to museological standards, while provenance questions will be clarified through internal and external research in order to establish the origin of numerous items.  

PADD (Psychoanalytic Document Database)

The EU project PADD was initiated in October 2004 and completed in September 2005. Following this first project phase, for which the EU provided half of the funding, the Sigmund Freud Foundation has taken responsibility for PADD’s operation, maintenance and development.

In its content, PADD is a Europe-wide web-based catalog and knowledge database that provides user-friendly access via website to primary sources in the history of psychoanalysis, such as letters, manuscripts, photographs and other documents from Sigmund Freud and other psychoanalysts. This website also features a knowledge database with information on the lives and work of numerous psychoanalysts, as well as extensive bibliographies of primary and secondary literature.