Does the better-than-average effect show that people are overconfident? Two experiments

Benoit, J-P, Dubra, J and Moore, D A (2014) Does the better-than-average effect show that people are overconfident? Two experiments. Journal of the European Economic Association, 13 (2). pp. 293-329.

Abstract

We conduct two experimental tests of the claim that people are overconfident, using new tests of overplacement that are based on a formal Bayesian model. Our two experiments, on easy quizzes, find that people overplace themselves. More precisely, we find apparently overconfident data that cannot be accounted for by a rational population of expected utility maximizers who care only about money. The finding represents new evidence of overconfidence that is robust to the Bayesian critique offered by Benoît and Dubra (Jean-Pierre Benoît and Juan Dubra (2011). “Apparent Overconfidence.” Econometrica, 79, 1591–1625). We discuss possible limitations of our results.

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Item Type: Article
Subject Areas: Economics
Additional Information: © 2014 European Economic Association
Subjects: S > Statistical testing
Date Deposited: 14 Nov 2016 15:17
Last Modified: 18 Jul 2018 16:03
URI: http://lbsresearch.london.edu/id/eprint/599
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