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Overconfidence as a social bias: Experimental evidence

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  • Proeger, Till
  • Meub, Lukas
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    Abstract

    The overconfidence bias is discussed extensively in economic studies, yet fails to hold experimentally once monetary incentives and feedback are implemented. We consider overconfidence as a social bias. For a simple real effort task, we show that, individually, economic conditions effectively prevent overconfidence. By contrast, the introduction of a very basic, purely observational social setting fosters overconfident self-assessments. Additionally, observing others’ actions effectively eliminates underconfidence compared to the individual setting.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 122 (2014)
    Issue (Month): 2 ()
    Pages: 203-207

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    Handle: RePEc:eee:ecolet:v:122:y:2014:i:2:p:203-207

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    Web page: http://www.elsevier.com/locate/ecolet

    Related research

    Keywords: Laboratory experiment; Overconfidence bias; Real effort; Self-assessment; Social interaction;

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