Overconfidence as a social bias: Experimental evidence

Till Proeger and Lukas Meub

Economics Letters, 2014, vol. 122, issue 2, 203-207

Abstract: The overconfidence bias is discussed extensively in economic studies, yet fails to hold experimentally once monetary incentives and feedback are implemented. We consider overconfidence as a social bias. For a simple real effort task, we show that, individually, economic conditions effectively prevent overconfidence. By contrast, the introduction of a very basic, purely observational social setting fosters overconfident self-assessments. Additionally, observing others’ actions effectively eliminates underconfidence compared to the individual setting.

Keywords: Laboratory experiment; Overconfidence bias; Real effort; Self-assessment; Social interaction (search for similar items in EconPapers)
JEL-codes: C91 D03 D83 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:122:y:2014:i:2:p:203-207

DOI: 10.1016/j.econlet.2013.11.027

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