Confidence, Self-Selection and Bias in the Aggregate

Benjamin Enke, Thomas Graeber and Ryan Oprea

No 30262, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The influence of behavioral biases on aggregate outcomes like prices and allocations depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. We conduct a series of betting market, auction and committee experiments using 15 classic cognitive bias tasks. We document that some cognitive errors are strongly reduced through self-selection, while others are not affected at all. A large part of this variation is explained by the quality of people's meta-cognition. In some cognitive tasks, confidence and performance are strongly positively correlated, while for others this link is absent or even negative.

JEL-codes: D01 D03 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-neu
Note: AP CF LE
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Published as Benjamin Enke & Thomas Graeber & Ryan Oprea, 2023. "Confidence, Self-Selection, and Bias in the Aggregate," American Economic Review, vol 113(7), pages 1933-1966.

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Journal Article: Confidence, Self-Selection, and Bias in the Aggregate (2023)
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