Gender identity, overconfidence, and risk attitudes

Abstract We explore the relationship between gender identity, overconfidence, and investment risk‐taking behaviors. We quantify overconfidence as a discrepancy between an individual's perceived and actual financial knowledge, and our empirical analysis reveals significant differences in overconfidence levels across gender identities. Consumers who identify as nonbinary exhibit significantly lower levels of financial overconfidence compared to individuals identifying as either male or female. The lower levels of overconfidence are attributed to a more modest self‐assessment of financial knowledge rather than a difference in actual knowledge. Higher overconfidence is linked with a greater willingness to take on financial risks. Nonbinary individuals exhibit a considerably lower inclination to take risks in their investment decisions. While nonbinary individuals are more likely to experience mental health challenges, these do not explain the reduced levels of overconfidence and risk‐taking. Moreover, the nonbinary pattern is not a generic minority effect.