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How do risk attitudes affect measured confidence?

Zahra Murad (), Chris Starmer () and Martin Sefton

No 2015-26, 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 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 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cbe and nep-exp
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Related works:
Journal Article: How do risk attitudes affect measured confidence? (2016) Downloads
Working Paper: How do risk attitudes affect measured confidence? (2014) Downloads
Working Paper: How do risk attitudes affect measured confidence? (2014) Downloads
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