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Excessive confidence in visually-based estimates

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  • Andrade, Eduardo B.
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    Abstract

    People exhibit excessive confidence in visually-based estimates, which in turn biases decision making. Three experiments support this assertion. Experiment 1 shows a strong impact of presentation format on estimation of proportions. Experiment 2 shows that people rely on these erroneous estimates to make incentive-compatible decisions even when objective information can be easily obtained. Experiment 3 demonstrates that the biased decisions disappear when confidence in visually-based estimates is called into question by the perceived complexity of the stimulus.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0749597811000938
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    Bibliographic Info

    Article provided by Elsevier in its journal Organizational Behavior and Human Decision Processes.

    Volume (Year): 116 (2011)
    Issue (Month): 2 ()
    Pages: 252-261

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    Handle: RePEc:eee:jobhdp:v:116:y:2011:i:2:p:252-261

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

    Related research

    Keywords: Overconfidence; Risk perception; Risk taking; Visual perception; Probability estimates; Gambling; Global processing; Numerosity; Likelihood judgment;

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    1. Alba, Joseph W & Hutchinson, J Wesley, 2000. " Knowledge Calibration: What Consumers Know and What They Think They Know," Journal of Consumer Research, University of Chicago Press, vol. 27(2), pages 123-56, September.
    2. Conlisk, John, 1993. " The Utility of Gambling," Journal of Risk and Uncertainty, Springer, vol. 6(3), pages 255-75, June.
    3. Weber, Elke U & Kirsner, Britt, 1997. "Reasons for Rank-Dependent Utility Evaluation," Journal of Risk and Uncertainty, Springer, vol. 14(1), pages 41-61, January.
    4. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
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