Investment Literacy and Individual Investor Biases: Survey Evidence in the Japanese Stock Market

In this paper, we analyzed the results of our survey on Japanese stock investor’s asset risk management and empirically examined the effect of their investment literacy on their decision-making biases. This paper revealed that the higher the investors’ investment literacy, the lower their overconfidence bias. This suggests that high investment literacy can prevent investors from being influenced by an overconfidence bias and consequently making biased decisions in investment. Therefore, efforts to improve investors’ investment literacy by enhancing social systems such as investment education could be beneficial in guiding investors to make unbiased investment decisions.