How do risk attitudes affect measured confidence?

Zahra Murad, Martin Sefton and Chris Starmer

Journal of Risk and Uncertainty, 2016, vol. 52, issue 1, No 2, 46 pages

Abstract: Abstract We examine the relationship between confidence in own absolute performance and risk attitudes using two confidence elicitation procedures: self-reported (non-incentivised) confidence and an incentivised procedure that elicits the certainty equivalent of a bet based on performance. The former procedure reproduces the “hard-easy effect” (underconfidence in easy tasks and overconfidence in hard tasks) found in a large number of studies using non-incentivised self-reports. The latter procedure produces general underconfidence, which is significantly reduced, but not eliminated when we filter out the effects of risk attitudes. Finally, we find that self-reported confidence correlates significantly with features of individual risk attitudes including parameters of individual probability weighting.

Keywords: Overconfidence; Underconfidence; Experiment; Risk preferences; C91; D81 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (35)

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Related works:
Working Paper: How do risk attitudes affect measured confidence? (2015)
Working Paper: How do risk attitudes affect measured confidence? (2014)
Working Paper: How do risk attitudes affect measured confidence? (2014)
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DOI: 10.1007/s11166-016-9231-1

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