Does the Better-Than-Average Effect Show That People Are Overconfident?: Two Experiments.

Benoît, Jean-Pierre and Dubra, Juan and Moore, Don (2009): Does the Better-Than-Average Effect Show That People Are Overconfident?: Two Experiments.

Abstract

We conduct two experiements of the claim that people are overconfident. We develop new tests of overplacement which are based on a formal Bayesian model. Our two experiments, on easy quizzes, find overplacement. More precisely, we find apparently overconfident data that cannot be accounted for by a rational population of expected utility maximizers with a good understanding of the nature of the quizzes they took.

• Item Type: MPRA Paper
• Language: English
• Keywords: Overconfidence; Better than Average; Experimental Economics; Irrationality; Signalling Models.
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General

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