Confidence biases and learning among intuitive Bayesians

Louis Lévy-Garboua, Muniza Askari and Marco Gazel
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Muniza Askari: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We design a double-or-quits game to compare the speed of learning one's specific ability with the speed of rising confidence as the task gets increasingly difficult. We find that people on average learn to be overconfident faster than they learn their true ability and we present an intuitive-Bayesian model of confidence which integrates confidence biases and learning. Uncertainty about one's true ability to perform a task in isolation can be responsible for large and stable confidence biases, namely limited discrimination, the hard–easy effect, the Dunning–Kruger effect, conservative learning from experience and the overprecision phenomenon (without underprecision) if subjects act as Bayesian learners who rely only on sequentially perceived performance cues and contrarian illusory signals induced by doubt. Moreover, these biases are likely to persist since the Bayesian aggregation of past information consolidates the accumulation of errors and the perception of contrarian illusory signals generates conservatism and under-reaction to events. Taken together, these two features may explain why intuitive Bayesians make systematically wrong predictions of their own performance.

Keywords: Confidence biases; Intuitive-Bayesian; Learning; Double or quits; experimental game; Doubt; Contrarian illusory signals (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-cbe
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Published in Theory and Decision, 2018, 54, pp.453-482. ⟨10.1007/s11238-017-9612-1⟩

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Related works:
Working Paper: Confidence biases and learning among intuitive Bayesians (2018)
Working Paper: Confidence biases and learning among intuitive Bayesians (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-01558394

DOI: 10.1007/s11238-017-9612-1

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