Santos-Pinto, Luís and Park, Young-Joon (2004): Forecasts of relative performance in tournaments: evidence from the field.
Download (261Kb) | Preview
This paper uses a field experiment to investigate the quality of individuals' forecasts of relative performance in tournaments. We ask players in luck-based (poker) and skill-based (chess) tournaments to make point forecasts of rank. The main finding of the paper is that players' forecasts in both types of tournaments are biased towards overestimation of relative performance. However, the size of the biases found is not as large as the ones often reported in the psychology literature. We also find support for the "unskilled and unaware hypothesis" in chess: high skilled chess players make better forecasts than low skilled chess players. Finally, we find that chess players' forecasts of relative performance are not efficient.
|Item Type:||MPRA Paper|
|Institution:||Universidade Nova de Lisboa|
|Original Title:||Forecasts of relative performance in tournaments: evidence from the field|
|Keywords:||Tournaments; Rationality; Field Experiment|
|Subjects:||J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments
A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines
|Depositing User:||Luís Santos-Pinto|
|Date Deposited:||09. May 2007|
|Last Modified:||14. Feb 2013 07:11|
Basu, S. and S. Markov (2004). “Loss Function Assumptions in Rational Expectations Tests on Financial Analysts Earnings Forecasts,” Journal of Accounting and Economics, 38: 171-203.
Burson, K, Larrick, R., and J. Klayman (2006). “Skilled or Unskilled, but Still Unaware of It: How Perceptions of Difficulty Drive Miscalibration in Relative Comparisons,” Journal of Personality and Social Psychology, 90, 60-77.
Camerer, C. (1990). “Do Markets Correct Biases in Probability Judgement? Evidence from Market Experiments” in J. Kagel and L. Green (Eds.), Advances in Behavioral Economics 2, Northwood, NJ: Ablex Publ. 125-172.
Camerer C. and D. Lovallo (1999) “Overconfidence and Excess Entry: An Experimental Approach.” The American Economic Review, Vol. 89, No. 1, 306-318.
Camerer, C. and R. Hogarth (1999). “The Effects of Financial Incentives in Experiments: a Review and Capital-labor-production Framework,” Journal of Risk and Uncertainty 19, 7-42.
Chen, Z. and A. Gionvanni (1992). “Target Zones And The Distribution Of Exchange Rates: An Estimation Method,” Economics Letters, v40(1), 83-89.
Clark, J. and L. Friesen (2003). “Rational Expectations of Own Performance: An Experimental Study.” Mimeo, University of Canterbury and Lincoln University.
DeGroot, M. (1970). Optimal Statistical Decisions, McGraw Hill.
Dunning, D., J. A. Meyerowitz, and A. D. Holzberg (1989). “Ambiguity and Self-Examination: The Role of Idiosyncratic Trait Definitions in Self-Serving Assessments of Ability,” Journal of Personality and Social Psychology, 57(6), 1082-1090.
Ferraro, P. (2003). “Know Thyself: Incompetence and Overconfidence,” Experimental Laboratory Working Paper Series, Georgia State University.
Gervais, S. and T. Odean (2001). “Learning to be Overconfident,” Review of Financial Studies, Vol. 14, No1, 1-27.
Kruger, J. (1999). “Lake Wobegon Be Gone! The Below-Average Effect and the Egocentric Nature of Comparative Ability Judgments,” Journal of Personality and Social Psychology, 77(2), 221-232.
Kruger, J., and D. Dunning (1999). “Unskilled and Unaware of It: How Difficulties in Recognizing Ones Own Incompetence Lead to Inflated Self-Assessments,” Journal of Personality and Social Psychology, 77, 1121-1134.
Moore, D. (2002). “Egocentric Biases and the Failure of Strategic Prediction.” International Association of Conflict Management, 15th Annual Conference. June 9-12, Park City, Utah.
Moore, D. and T. Kim (2003). “Myopic Social Prediction and the Solo Comparison Paradox.” Journal of Personality and Social Psychology, 85, No. 6, 1121-1135.
Moore, D. and D. Cain (2005). “Overconfidence and Underconfidence, ”Working Paper, Carnegie Mellon University.
Hoelzl, E. and A. Rustichini (2005). “Overconfident: Do You Put Your Money on It?” The Economic Journal, Vol. 115, 305-318.
Isaac R. and J. Duncan (2000). “Just Who You Are Calling Risk Averse?” Journal of Risk and Uncertainty, 20, 177-187.
Santos-Pinto, L. and J. Sobel (2005). “A Model of Positive Self Image in Subjective Assessments.” The American Economic Review, Vol. 95, No. 5, 1386-1402.
Selten, R., Sadrieh, A., and K. Abbink (1999). “Money Does Not Induce Risk Neutral Behavior, but Binary Lotteries Do Even Worse,” Theory and Decision 46, 211-49.
Smith V, and J. Walker (1993). “Rewards, Experience and Decision Costs in First Price Auctions,” Economic Inquiry, 31, 237-244.
Sonnemans, J. and T. Offerman (2001). “Is the Quadratic Scoring Rule really incentive compatible?” Working Paper, University of Amesterdam.
Van den Steen, E. (2004). “Rational Overoptimism (and Other Biases),” American Economic Review, 94(4), 1141-1151.
Zarembka, P. (1974). “Transformation of Variables in Econometrics,” in: Paul Zarembka, ed., Frontiers in Econometrics, Academic Press, New York.