Relationship between Overconfident Investor, Price Prediction Errors and Transaction Losses in the Indonesian Sharia Capital Market (Overestimation Calibration Experiment Approach)

High overconfidence (a high degree of calculation error) among investors can lead to an overestimation of the price of securities, which can lead to unintentional purchases at a higher price or sales at a price below the underlying value, which can result in transaction losses. The purpose of this study is to examine the connection between overconfidence and the precision of stock price forecasts in the Sharia capital market of Indonesia. This study approach observes investors' reactions in an experimental laboratory setting after they are provided with important information. Based on self-confidence, the research design was split into three classification groups. Markets that get negative news and markets without information are the two categories of treatment. Based on the conducted experiments, the research findings demonstrated that in all experimental market sessions, investors with high overconfidence tended to overestimate the accuracy of their knowledge and information, resulting in higher average predictions and price errors than investors with low overconfidence. This data implies that investors with a high degree of confidence are susceptible to self-deception. The study's findings also demonstrate that, in contrast to investors with low overconfidence, those with strong overconfidence do not necessarily experience losses, even though their average prediction error or price is larger.