On the modified measure of illusion of control

Marcin Czupryna, Elżbieta Kubińska, Łukasz Markiewicz and Tadeusz Tyszka

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2021, vol. 90, issue C

Abstract: Two potential sources of the illusion of control phenomenon are discussed in the literature, prior knowledge or beliefs on the exercised level of control and the control process itself. The first source causes biases due to prior assumptions about the levels of control; the second source generates biased Bayesian processing, due to exerting some degree of control and thus having engagement in the process that generates outcomes. The illusion of control (IOC) phenomenon is re-examined by means of comparison with a proposed decision model using elements of Bayesian updating. In this paper we consider an agent that for a certain period of time is limited to merely observing, yet for another period of time also may control the results of a random process (a series of successes and failures). Namely, an agent may observe the frequency of successes in both cases: when merely observing a process without any degree of control and also when controlling the process. Agents have prior beliefs about their degree of control over the probability of a successful outcome. The agent under consideration is assumed to be partly rational in nature, as understood by the following assertions. We assume that an agent uses a Bayesian updating process to take into account the prior beliefs when asked about the perceived probabilities of success - when simply observing the process and when actually controlling it. However, we weaken the assumption about perfect rationality by assuming that the perceived probability of success may be further biased by exerting some measure of control over the process (but not when only observing the process). In our paper we propose an analytical method for identifying this part of the observed IOC which is caused by the prior beliefs held by such an agent.

Keywords: Illusion of control; control heuristic; Bayesian analysis; prior distribution (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214804320306911
Full text for ScienceDirect subscribers only

Related works:
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:eee:soceco:v:90:y:2021:i:c:s2214804320306911

DOI: 10.1016/j.socec.2020.101648

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().