Mutual fund investors’ knowledge calibration and behavioral biases
The investment decision-making process of mutual fund investors (simply referred to as “investors”) is irrational and biased because investors make investment decisions under certain constraints (Montier 2002 ). These constraints may be associated with the investor, such as their limited capability and commitment or come from the external environment, such as having access to limited information (Kornov and Thissen 2000 , Simon 1990 ). Such constraints, directly or indirectly, are likely to impact the knowledge structure of investors by infl uencing their calibration of self-knowledge (Alba and Hutchinson 2000 ). Knowledge calibration refers to the correspondence between objective knowledge and subjective assessment of selfknowledge (Pillai and Hofacker 2007 ). Where the correspondence between objective knowledge and the subjective assessment of self-knowledge is high, the individual is described as wellcalibrated, but poor correspondence implies miscalibration of self-knowledge. The empirical evidence suggests that miscalibration due to overconfi dence in one’s self-knowledge is a prevalent phenomenon and is recognized to be a stylized fact of the human cognition (Alba and Hutchinson 2000 ).