The Effect of Manager s Overconfidence on Reducing Risk of Stock Price fall: Case of Companies Listed on the Tehran Stock Exchange

The present study is conducted with the aim of measuring the effect of manager s over confidence on reducing the risk of the stock price fall of companies listed on the Tehran stock exchange. It is classified as an ex-post factor research. On the other hand, the present research is of descriptive and survey (correlative) type performed based on regression equation. It is alsocategorized as an applied research in terms of its goal. Research population includes all companies listed on Tehran stock exchange between 2010 and 2014 which delivered their financial statements to stock exchange organization within the given years. The reason behind doing so is getting access to reliable information and audited financial statements. After making required adjustments, 80 companies containing all above-mentioned requirements wereselected to include in research samples. Hypothesis analysis results showed that the manager s overconfidence in reducing the risk of stock price fall would affect the listed companies on the Tehran stock exchange. However, given the coefficient value of 0.584 between the manager s overconfidence variable and the drop in the risk of stock price fall, it is revealed that the risk of stock price fall would increase the manager s overconfidence increase.