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DOES THE BETTER-THAN-AVERAGE EFFECT SHOW THAT PEOPLE ARE OVERCONFIDENT?: TWO EXPERIMENTS

Jean-Pierre Benoît, Juan Dubra () and Don A. Moore

Journal of the European Economic Association, 2015, vol. 13, issue 2, 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.

Date: 2015
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Working Paper: Does the better –than- average effect show that people are Overconfident?: two experiments (2013) Downloads
Working Paper: Does the Better-Than-Average Effect Show That People Are Overconfident?: Two Experiments (2013) Downloads
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Journal of the European Economic Association is currently edited by Fabrizio Zilibotti, Dirk Bergemann, Nicola Gennaioli, Claudio Michelacci and Daniele Paserman

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