INFLUENCE OF HEXACO PERSONALITY MODEL ON OVERCONFIDENCE AMONG RETAIL INVESTORS

Abstract

The paper examines the relation between HEXACO personality model and levels of Overconfidence among retail investors who invests in equity, mutual funds and bonds. The 24-item Brief HEXACO Inventory (BHI) developed by De Vries was used to measure HEXACO through a survey of 208 retail investors. The findings of the study suggest that there is a significant positive association between openness to Experience(O) and High Overconfidence, and a significant negative association was found between Honesty-humility(H), Emotionality(E), Agreeableness(A), Conscientiousness (C) and High Overconfidence. Extraversion (X) was found to have no impact on overconfidence. The study contributes to behavioural finance by helping to understand individual investor’s personality when it is measured through HEXACO model. HEXACO model incorporated all the variance in personality that is described by Five Factor Model(FFM) and those dimensions which are not part of FFM. No previous studies have looked into behavioural biases through HEXACO, especially among Indian investors