Confidence under pressure: Between self-assurance, doubt, and reconstruction among novice investors in a stock market simulation

Abstract

This study examines how confidence develops, weakens, and is reconstructed among novice investors during a stock market simulation. The study adopts a qualitative and exploratory approach based on fifteen semi-structured interviews conducted after a four-hour stock market simulation involving novice investors. Thematic analysis was used to reconstruct confidence trajectories and compare participants’ reactions to uncertainty, gains, losses, and rankings. Initial confidence ranged from exploratory curiosity and confidence based on preparation to doubt associated with limited experience. Early gains and favorable rankings often reinforced participants’ perceived competence, sometimes encouraging excessive risk-taking. Losses were associated with stress, frustration, doubt, and a reduced sense of control. Three forms of confidence reconstruction emerged: adaptive reconstruction through learning and decision adjustment, compensatory reconstruction through attempts to recover losses, and defensive reconstruction through withdrawal or reduced risk exposure. Confidence among novice investors is an affective, cognitive, and temporal process that is continuously revised in response to feedback. Financial education and simulation-based training should help novices interpret gains and losses, calibrate confidence, and distinguish reflective learning from emotionally driven recovery behavior.