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Apparent Overconfidence

Juan Dubra () and Jean-Pierre Benoit

No 1106, Documentos de Trabajo/Working Papers from Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo.

Abstract: It is common for a majority of people to rank themselves as better than average on simple tasks and worse than average on dificult tasks. The literature takes for granted that this apparent miscon?dence is problematic. We argue, however, that this behaviour is consistent with purely rational Bayesian updaters. In fact, better-than-average data by itself cannot be used to show overcon?dence; we indicate which type of data can be used. Our theory is consistent with empirical patterns found in the literature.

Keywords: Overconfidence; Better than Average; Experimental Economics; Irrationality; Signalling Models (search for similar items in EconPapers)
JEL-codes: D11 D12 D82 D83 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
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