Overconfidence that leads to excessive trading cheats investors -- especially men -- out of better returns on their common-stock investments, according to a study by researchers at the University of California, Davis. Financial experts Terrance Odean and Brad M. Barber, both of the university's Graduate School of Management, found that men trade 45 percent more than women and earn annual net risk-adjusted returns that are 1.4 percent less than those earned by women. "Both men and women detract from their returns by trading," the researchers write. "Men simply do so more often." To explore the role of overconfidence in high levels of trading, the researchers used gender as a proxy -- based on psychological research that men are more overconfident than women. The study used a discount brokerage firm's data on the common-stock investments of 37,664 households from February 1991 through January 1997. The researchers found that single men trade 67 percent more than single women and earn annual net risk-adjusted returns that are 2.3 percent less than those earned by single women. The difference in annual net risk-adjusted returns realized by married men and women is only 1.2 percent. Among a sample of one third of the total accounts studied, 47.8 percent of women reported having good or extensive investment experience while 62.5 percent of men reported the same level of experience. The study documents -- for what is believed to be the first time -- that men tend to invest in smaller, value stocks with higher market risks, and, therefore, the researchers adjusted net returns for these risk factors. The working paper, titled "Boys Will Be Boys: Gender, Overconfidence and Common Stock Investment," will be presented at academic seminars in Phoenix, London, Vienna and Fontainebleau in November. It is available as a PDF file at http://www.gsm.ucdavis.edu/ ~bmbarber/working.html.