Confidence, Self-Selection, and Bias in the Aggregate

Benjamin Enke, Thomas Graeber and Ryan Oprea

American Economic Review, 2023, vol. 113, issue 7, 1933-66

Abstract: The influence of behavioral biases on aggregate outcomes depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. In betting market, auction and committee experiments, we document that some errors are strongly reduced through self-selection, while others are not affected at all or even amplified. A large part of this variation is explained by differences in the relationship between confidence and performance. In some tasks, they are positively correlated, such that self-selection attenuates errors. In other tasks, rational and biased people are equally confident, such that self-selection has no effects on aggregate quantities.

JEL-codes: C91 D44 D91 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20220915 (application/pdf)
https://doi.org/10.3886/E185741V1 (text/html)
https://www.aeaweb.org/doi/10.1257/aer.20220915.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aer.20220915.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Confidence, Self-Selection and Bias in the Aggregate (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:113:y:2023:i:7:p:1933-66

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20220915

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().