How do risk attitudes affect measured confidence?

Zahra Murad, Chris Starmer and Martin Sefton

No 2014-18, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We examine the relationship between confidence in own absolute performance and risk attitudes using two 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" (overconfidence in easy tasks and underconfidence 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 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.nottingham.ac.uk/cedex/documents/paper ... on-paper-2015-26.pdf Revised Version, November 2015 (application/pdf)

Related works:
Journal Article: How do risk attitudes affect measured confidence? (2016)
Working Paper: How do risk attitudes affect measured confidence? (2015)
Working Paper: How do risk attitudes affect measured confidence? (2014)
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:not:notcdx:2014-18

Access Statistics for this paper

More papers in Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC.
Bibliographic data for series maintained by Jose V Guinot Saporta ().